Preneed Insurance: Is it Right For You?

Preneed Insurance (or Funeral Insurance): Is it Right For You?

There are many ways to pay for funeral costs. You can use savings or crowdfund the money, but these options aren’t always an option. Ideally,  the deceased’s family won’t be put in the financial hot seat: this is where preneed insurance comes in. 

Preneed insurance (also known as funeral insurance, burial insurance, and final expense insurance) is a way to pre-pay funeral expenses through a funeral home, mortuary, cemetery, or insurance company. Generally, it can be broken down into two categories:

  • Preneed Insurance is usually provided by a funeral home, mortuary or cemetery, and the payout can usually (but not always) only be used at that particular business. Funeral directors work also work with the buyer to ensure the future service is paid for and carried out as the deceased intended. 
  • Funeral Insurance (or burial insurance, or final expense life insurance) is usually sold by an insurance company and provides a cash payout which can be used at any funeral home (or even for non-funeral purposes). Although payout beneficiaries have more flexibility, the purchaser loses some control over how and where their funeral is conducted.

Ultimately, both preneed insurance and funeral insurance let family and friends grieve instead of worrying about funeral financing. Dealing with death can be emotionally tasking, and removing the burden of paying for a funeral can be especially beneficial to those you leave behind.

 

What does Funeral Insurance / Preneed Insurance cost?

Funeral insurance payouts usually range from $5,000-$20,000, enough to cover the funeral and any incidental costs related to the deceased’s passing. The smaller payout size means funeral insurance is a more affordable option relative to regular life insurance. Buyers pay premiums in a lump-sum or on a monthly basis.

We’d love to give an exact answer about how much burial insurance costs, but realistically there are too many compounding factors to give a one-size-fits-all quote. Major factors affecting premiums include:

  • Policy payout: This one is kind of obvious, but the bigger your policy the bigger your premiums.
  • Age: All things considered, younger buyers are less likely to trigger the policy in the near future, which makes for cheaper payments.
  • Geography: The state you reside in determines both regulations and the insurance companies’ competition, which in turn affects premiums.
  • Health Habits: Because smoking lowers life expectancy, it also increases your burial insurance premiums

Ultimately, the best way to estimate funeral insurance premiums (and get the best deal) is to have insurance companies compete with multiple quotes. Visit our partner to get your personalized quotes, or to just learn more about the process and providers.

 

Funeral Financing with Funeral Help

But how do you afford preneed insurance if your money is tight and your credit isn’t ideal?

Funeral Help supports funeral homes and their families with affordable credit of up to $10,000.  Funeral Help provides fixed-rate loans of up to $10,000 to cover funeral expenses (or pre-need plans), with no sign-up fees or prepayment expenses. And even if you have bad credit or no credit, you might still qualify for a loan. For more information on how Funeral Help can help you with financing your funeral, visit our FAQs page or give us a call at (844) 311-7772.

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