When considering whether to buy final expense insurance or opt for prepaid funeral expenses, there are several factors to consider.
First, lets make sure we have a good definition of both of these dramatically different funeral related financial plans :
Prepaid (Also called Pre-need) insurance and final expense insurance are two distinct types of insurance policies that serve different purposes. Let’s define each one:
Pre-need Insurance: Pre-need insurance, also known as pre-need funeral insurance, prepaid or burial insurance, is a type of insurance policy specifically designed to cover the expenses associated with funeral and burial costs. It allows individuals to plan and pay for their funeral arrangements in advance, relieving their family members of the financial burden and decision-making during a difficult time. Pre-need insurance policies typically cover expenses such as funeral services, caskets, urns, cemetery plots, headstones, and other related costs. These policies are often offered by funeral homes and the redemption is generally through the funeral home exclusively.
Final Expense Insurance: Final expense insurance, also referred to as burial insurance or funeral insurance, is a type of whole life insurance policy that is designed to cover the costs associated with one’s final expenses, including funeral and burial expenses. Unlike pre-need insurance, final expense insurance provides a lump-sum benefit to the beneficiaries upon the policyholder’s death, which can be used to cover funeral costs, outstanding medical bills, legal fees, or any other financial obligations left behind. Final expense insurance policies are typically easier to qualify for compared to traditional life insurance policies and usually have lower benefit amounts, making them more accessible for individuals who may not be eligible for or need a larger life insurance policy. Final Expense Insurance policies are prohibited under Florida law from being sold by Funeral Homes, and are only available as state certified plans from insurance agents like Final Expense Florida.
In summary, pre-need insurance focuses specifically on covering funeral and burial expenses, while final expense insurance provides a lump-sum benefit to cover various end-of-life expenses, including funeral costs.
Here are a few reasons why final expense insurance might be a more suitable option for most individuals:
Flexibility: Final expense insurance provides flexibility in how the funds are used. While prepaid funeral expenses are specifically allocated for funeral costs, final expense insurance proceeds can be used for various purposes, including funeral expenses, medical bills, outstanding debts, or any other financial obligations your loved ones may have. The family can use the whole benefit for anything they want, and keep what ever is left over. In short, it’s an insurance payout payable on death in a fixed amount for the family to use as they choose.
Cost Coverage: Final expense insurance typically covers more than just funeral expenses. It can also provide coverage for medical bills, legal fees, and other end-of-life costs that may arise. Prepaid funeral expenses, on the other hand, only cover the specific funeral services and merchandise outlined in the prepaid plan.
Portability: Final expense insurance is portable, meaning you can take it with you if you move to a different location or if you change your preferred funeral home. Prepaid funeral plans are often tied to specific funeral homes and may not be transferable if you relocate.
Investment Potential: Final expense insurance policies may accumulate cash value over time, depending on the type of policy you choose. This means the policy could potentially grow in value, offering additional financial security or the option to borrow against it if needed. Prepaid funeral expenses do not provide any investment potential.
Income Replacement: Final expense insurance can serve as a means to replace income for your loved ones after you pass away. The insurance payout can help cover ongoing living expenses, mortgage payments, or other financial obligations that may arise. Pre-paid funeral expenses on the other hand only cover funeral expenses.
Ease of Payment: Final expense insurance policies offer various payment options, allowing you to pay premiums over time, rather than making a lump-sum payment upfront as generally required with prepaid funeral expenses. This can be more manageable for individuals who prefer a more flexible payment schedule.
Ultimately, the choice between final expense insurance and prepaid funeral expenses depends on your individual preferences, financial situation, and goals. It’s advisable to carefully evaluate both options, consider your specific needs, and consult with a financial advisor or insurance professional to make an informed decision.
Final Expense Florida is the fastest growing State certified independent insurance agent in the State of Florida. In 5 minutes, we can give you a quotation. In under a half hour, we can underwrite any Florida resident with a Florida State Certified Final Expense policy with guaranteed issue and no medical examinations.
Visit https://www.FinalExpenseFlorida.com and register for a no obligation quotation. Final Expense Florida is licensed by the State of Florida to work with State certified insurance companies, all of which are A rated by AM Best for financial stability. You can easily get a final expense policy regardless of medical history, current medical condition or age. Call Final Expense Florida with any questions at 888-434-6471 (or 727-359-0002 from Pasco, Pinellas or Hillsborough). It’s the right thing to do for your family.