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Do You Need Funeral Insurance?

Some individuals are looking for a small amount of money to be available when they pass away for their family to help them cover funeral expenses.  The National Funeral Directors Association says the average funeral costs about $6500 and this ends up being a lot of money for some individuals.  Unfortunately, most large insurance companies do not offer such small policies according to the article "Funeral Insurance: Your Final Policy" by Barbara Marquand on FoxBusiness.com.

There are some smaller insurance companies that do offer very small policies to help cover the overall cost of a funeral.  Colonial Penn is one insurer that offers these types of policies.  They are marketed to seniors for funeral expenses specifically and are guaranteed acceptance life insurance policies.  This appeals to many seniors since a medical exam is not required.  Because no medical exam is required, premiums tend to be more expensive as insurers need to offset the risk of having potentially unhealthier policyholders.  If you are healthy, you will probably end up getting a better deal through another life insurance option.

Another type of insurance that can help cover funeral expenses is Preneed Insurance.  These whole life insurance policies can be purchased directly from a funeral home.  With this type of policy you choose the services you need and the policy premiums will cover the cost.  Funeral homes with this type of offer have insurance agents on staff who will sell the policies.  In some states, the funeral home is named the beneficiary so funds will automatically go towards funeral costs.  Often times, with this type of option, prices aren't guaranteed so it's important to read the fine print and understand how much you will actually end up paying out of pocket, if any.

Of course, a standard life insurance policy can be a great way to ensure your expenses are paid for.  Most companies offer policies starting at $25,000 and although this is much more than a typical funeral, there are other costs associated with passing away that may come up.  Also, if you leave some cushion with your beneficiary it relieves them of some stress during a very tumultuous time.  Meet with a financial advisor to go over all of your options and help you decide which one will work best for you.  Look for a Texas life insurance quote to see if funeral life insurance is worth your money.

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