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What's Pre-Need Funeral Insurance VS Final Expense Insurance - YouTube
Channel: Gibson Benefit Plans LLC
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what's the difference between a pre-need
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plan and final expense insurance
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happy couple if you're considering
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planning for your funeral ahead of time
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you're making a smart choice doing so
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can save your family both money and
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decision-making during an emotional
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period
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luckily there are many options available
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when it comes to planning your funeral
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in advance we'll cover the two main
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options
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pre-need plans and final expense
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insurance but first let's look at how
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much funerals can cost the average cost
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of funerals the average funeral cost is
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more than many people think the national
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funeral directors association's most
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recent estimate of the median cost of a
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funeral with cremation is about 5150 and
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its median cost of a funeral with burial
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is about nine thousand one hundred
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thirty five dollars those numbers don't
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consider things like burial plots
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upgraded urns or caskets published
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obituaries headstones or flowers the
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total for a funeral can easily approach
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ten thousand dollars or more potentially
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leaving unprepared families with a huge
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financial burden
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paying for a funeral
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people pay for funeral expenses in
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different ways
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some might begin setting money aside
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regularly in a savings or low risk
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investment account earmarked for this
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purpose the problem with traditional
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saving is the tremendous amount of
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discipline required to consistently save
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and to leave the savings alone once it's
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there
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others who already have existing life
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insurance plans may choose to designate
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a certain amount of the death benefit
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toward funeral expenses however
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depending on your age
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your life insurance may be a term policy
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that expires after a certain period of
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time
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if you don't have some form of permanent
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life insurance you can easily find
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yourself unprepared if your existing
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insurance expires
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in your research you may have
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encountered the terms pre-need also
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called prepaid funeral plans and final
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expense insurance policies how do they
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work and what are the differences
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between the two
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below are two basic explanations of the
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two
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pre-need plans
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a pre-need plan is purchased from a
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specific funeral home
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to set it up you choose the funeral home
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you want to work with and specify the
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arrangements you desire the funeral home
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prices it out and you pay the cost ahead
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of time either all at once or over time
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final expense policies
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a final expense policy is purchased from
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a life insurance company and the
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beneficiary can be anyone of your
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choosing the policies have death
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benefits that generally range from about
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ten thousand dollars and the money can
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be used for anything
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including funeral costs transportation
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of family members or any unpaid medical
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expenses
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what to know when considering a pre-need
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plan
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guaranteed services and non-guaranteed
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services
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should you be fortunate enough to live
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long after you set up your pre-need plan
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the cost of your desired funeral may
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increase depending on whether these
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costs were guaranteed services or
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non-guaranteed services determines
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whether or not your family has to make
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up the difference
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for example if a guaranteed service
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costs two thousand dollars now but the
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cost rises to three thousand dollars by
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the time you die your family does not
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have to make up the difference the cost
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of guaranteed services will always be
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covered by the funeral home regardless
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of how much your plan is worth pre-need
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plans typically forecast this increase
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in costs and price their premiums
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accordingly
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if a service is not guaranteed your
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family may be responsible for the
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difference in cost
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check with the pre-need provider to see
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how their plan handles non-guaranteed
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services
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funeral homes determine the prices of
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their services
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because pre-need plans are purchased
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through funeral homes your plan is
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designed to cover the specific costs
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that a particular funeral home charges
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but costs can vary from funeral home to
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funeral home one funeral home may charge
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twice as much for the same service
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if you decide to purchase a pre-need
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plan be sure and compare the general
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price list gpl of several funeral homes
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before deciding who to purchase the plan
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from
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questions to ask here are some questions
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the ftc encourages you to ask when
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considering prepaying for funeral
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services according to its booklet
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shopping for funeral services
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what exactly is included in the cost
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does the cost cover only merchandise
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like a casket or earn or does it include
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other funeral services
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what happens to the money you have paid
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state requirements differ in how the
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funds must be handled
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what happens to any interest income
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are you protected if the funeral home
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goes out of business
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can you cancel the contract and get a
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full refund
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what happens if you move or die while
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away from home
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facts
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what to know about final expense
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insurance
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do final expense insurance policies
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offer flexibility
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with final expense life insurance the
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benefit can be used for anything it
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doesn't have to cover funeral costs if
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your beneficiary chooses to use the
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benefit to help cover funeral expenses
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they don't have to make the arrangements
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with any specific funeral home
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the cash benefit from a final expense
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policy can be used anywhere
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our final expense policies dependent on
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funeral homes
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since your policy is not dependent on
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any particular funeral home you needn't
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worry about whether a certain funeral
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home gets sold or goes out of business
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you also won't be locked into any
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specific prices you have the freedom to
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price shop the core services as well as
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any funeral items offered by the home
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such as headstones and caskets
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are all final expense policies the same
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not all policies are the same depending
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on what you want to protect some final
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expense policies may be better for you
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than others in general most final
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expense insurance companies only provide
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a death benefit to your beneficiary they
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don't provide any assistance with
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handling the funeral arrangements or
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price shopping funeral items
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because most people use final expense
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life insurance to help cover funeral
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costs it's important to make sure you
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choose a final expense provider that
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includes this as part of their policy
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choosing a final expense policy that
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will help your family navigate the
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funeral industry can help protect them
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from overspending on funeral
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arrangements at gibson benefit plans llc
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we strive to provide the maximum
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benefits we can to our clients and
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fulfill their needs to contact us you
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can call us at
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816-77509 or email us at www.gibsonv
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