A question I get asked quite often from friends and family is "How do I pay for a funeral with life insurance?" This particular question is important as there are many different answers. One of the most important steps to take when planning a funeral is to determine the amount of insurance needed. The amount of coverage needed will depend on the age of the deceased, the expected length of the person's life and the amount of insurance desired. Here are some tips on how to pay for a funeral with life insurance.
When asking how long does payout take, it is important to coordinate with the funeral home ahead of time. If the insurance agent does not coordinate with the funeral home or the family, this could potentially cause a delay in getting the proper amount of death benefits. In addition, if a person were to die before they got the proper amount of insurance coverage, then the survivors may not be properly compensated. Having the proper amount of coverage could also prevent issues to claim for death benefits.
When asking how long does payout take, it is also important to determine how long you will need to claim. Some insurance policies allow you to make a claim for a specific time period after your death.
How to pay for a funeral with life insurance should also include the cost of any settlement payments that are due after your death. It is common that these types of payments can be thousands of dollars. This is especially true if the person that you were responsible for has been the primary wage earner in your family. Settlement payments can often be a great benefit if the life insurance policy was sufficient to cover the expenses of funeral costs and other related costs. In some cases a settlement payment can be completely tax deductible, depending on when it is received.
. If an individual purchases a permanent life policy that will last their lifetime, the death benefits will usually last a lifetime. However, most policies only have a limited amount of time for them to be active. For instance, in some cases a policy can be in effect for ten or twenty years but it can only remain in effect for four. Policy life can end whenever a policy holder becomes ineligible for coverage by their insurance company. The amount of time varies and can change from one company to another.
Life insurance coverage also greatly impacts how long payout takes. The cost of life insurance policies is based upon how much you want to cover. The cost of life policies is based upon the age at which they are purchased and how many total years you wish to cover your family and loved ones with this type of policy. The amount of coverage that you purchase is determined by how much you can afford to cover in premiums and how long you expect to live. In essence, you can pay high premiums and stay covered indefinitely or you can pay lower premiums and live for a shorter amount of time.
Insurance premiums can increase over time. As you approach the five year mark there are some significant increases in premiums that you can expect to experience. Once you reach the tenth year, you will likely pay very close to the cost of coverage that you purchased once your coverage had begun. After the twelfth year, the cost of coverage decreases dramatically and can even be less than what you paid in premiums if you had purchased the policy in its entirety. Therefore, it is very important that you carefully select the amount of time you wish to receive a payout from your policy and how much your family and loved ones should be covered for.
Steve Schafer is the founder of TheEulogyWriters and is probably the most prolific eulogy writer (and, no doubt, the best) anywhere. He lives in Michigan and has been writing eulogies for well over thirty years. The articles in this blog are designed to help people through the process of losing loved ones.