A paper titled "Funeral Insurance Policy" surrounded by other papers, a calculator and a pen.

Top 5 Funeral Insurance Plans

Funeral Insurance Plans

Did you know that the average funeral can cost anywhere from $7,000 to $12,000? Funerals aren’t exactly something fun to discuss, but they are something that is inevitable no matter who you are. While we might not be too fond of talking about or planning a funeral, it is better to be prepared now rather than leaving our loved ones with no funds or clues as to what we wanted for our funeral. This is why so many people purchase funeral insurance plans.

What is Funeral Insurance?

Funeral insurance, also known as burial insurance or life insurance, can be purchased to cover final expenses at the end of one’s life. This kind of insurance has different coverages depending on what kind you purchase. It is generally purchased as one of two options: standard or pre-need.

So, what’s the difference between the two?

Well, standard funeral insurance is purchased through a life insurance company as a part of a life insurance policy. A standard funeral insurance policy will include things like the funeral home service and transportation costs. Depending on the type of burial, it can cover the cost of the casket, headstone and burial, or the cost of cremation and the urn. Standard funeral insurance would also help cover fees left to your loved ones, like the use of a lawyer, medical bills and debt.

Pre-need is different in that it is an arrangement made through the insurance company or even directly with the funeral home. Pre-need is a dollar amount that is provided to the insurer or funeral home to cover the costs of the funeral. People often purchase this funeral insurance to pay for it not knowing that it could cost more when they pass. The insurance provider or funeral home will then be responsible for arranging your funeral instead of a loved one.

Another big difference between these two types of funeral insurances is that if there are any funds left over from a standard plan, they are paid out to your beneficiary. This is not the case with a pre-need plan — the insurer or funeral home would get the remainder of the funds.

Benefits of Funeral Insurance

There are a lot of benefits to having funeral insurance, and the biggest one is peace of mind. With it you can feel assured that should anything happen to you, there will not be any unexpected costs left to your loved ones.

Another benefit of purchasing funeral insurance would be that you have all of the arrangements set up for how you would like your funeral to be performed. Funeral insurance can give you the options to have all the services you want pre-paid for without any added headaches for your loved ones.

Finally, funeral insurance plans are affordable, as they take your current age at the time of signing up, gender and insurance needs into account. Once you sign up, the amount you pay never increases. This means that the sooner you sign up for one the better, because oftentimes the premium will be lower for younger people.

Top 5 Funeral Plans

Maybe now you are interested in purchasing funeral insurance, but you are not quite certain which company to go with. Here are my recommendations for the top five companies you should be looking at.

1. AARP Guaranteed Acceptance Life Insurance

As usual, the AARP offers one of the top policies when it comes to funeral insurance. They are widely seen as having one of the best offerings out there. Their guaranteed life insurance program offers $2,500 to $25,000 of coverage without a medical examination or health questionnaires. It is available to be initially purchased by any AARP members aged 50 to 80 and their spouses aged 45 to 80. Finally, the premium will cover the cost of not only the funeral, but unpaid bills, mortgage payments and more.

2. Mutual of Omaha

Another company that is widely accepted for having one of the top funeral plans would be Mutual of Omaha. Their whole life insurance policy allows you an “a la carte” style menu to choose from when selecting your plan. They also offer two types of plans: the Guaranteed Life, which does not have a medical questionnaire, and the Living Promise plan, which takes your current health and tobacco use into account. If you are healthy and a non-smoker, the Living Promise plan could be for you, as it may offer you lower rates.

Mutual of Omaha is also known for having the most flexibility in age for people wanting to sign up. Anyone aged 45 to 85 can sign up for a plan with them. Their plan coverage will range anywhere from $2,000 to $25,000 depending on what state you live in.

3. Foresters Financial

Foresters Financial offers the best policy if you are looking for coverage add-ons at no additional costs. While most funeral plan providers will charge extra for accidental death, accelerated death due to terminal illness and family health coverage for a natural disaster, Foresters includes all of that in their premium price.

Foresters Financial allows anyone aged 50 to 85 to sign up for their Plan Right Whole Life Insurance and the coverage lasts to age 121. The plan will cover anywhere from $5,000 to $35,000.

4. Gerber Life Insurance

Gerber Life Insurance offers a variety of plans with four different options. Their policies are also guaranteed for anyone aged 50 to 80. Their policies have the added bonus that they put aside a certain amount of money from each of your payments that will build up. While you may select one of their plans that will cover anywhere from $5,000 to $25,000, the additional money will build in an account payable to your beneficiaries upon your passing. This means the longer you have the policy the more money your loved ones can receive.

5. AIG

Finally, AIG is known as the top insurance to go with if you are concerned with a terminal illness. They have an accelerated death add-on that allows you to access the funds from your premium early should you fall ill with a terminal illness. If you are diagnosed with a chronic illness, they will even refund you up to 25% of what you have paid for your premium.

The AIG Guaranteed Whole Life Insurance is available to purchase for anyone aged 50 to 80 with no health questionnaire or medical exam required. It also provides coverage benefits ranging from $5,000 to $25,000.

Whether you have it or not, funeral insurance is worth the money for the added peace of mind when it comes to end-of-life arrangements. It is worth it to consider now rather than later.