Article by Marilyn Katz
Many families have found out how much funerals and burial cost. It can be shocking to pay thousands of dollars to bury a loved one. There are some ways to plan for this so you will have one less thing to worry about during a time of stress.
In the US, burials and funerals can cost thousands of dollars. Families are usually confronted by a lot of expenses when a loved one passes away. Family members will take time off from work, some may have to travel, and others may have to provide food and housing for visitors. Nobody really likes to think about this expense, but a little planning can save your family a lot of stress in the future. You can, however, choose to plan for this.
It would be easiest to save the cash. The cash, in a savings account, can be used to pay for a funeral and all of the other expenses. However, many seniors lived on a fixed income and cannot really afford to save money. Grown children, or other family members, may also want to help. But they may be strapped for cash or put it off because it just does not seem like an urgent problem.
Burial policies are one way to plan for this expense. Sometimes it is also called funeral insurance or final expense insurance. These are actually whole life insurance policies that have been designed to provide cash to pay for expenses that crop up when people pass away. Instead of trying to rely on yourself to save money, you would pay a premium every month.
Compared to other life insurance policies, they have rather small face values. They are usually purchased for ,500 TO ,000. They have a small death benefit, and so they are usually very easy to apply for. The smaller face value also helps keep the rates fairly low for many applicants. They are usually marketed to people between the ages of 50 and 80, though some may be sold to people as young as 40 or as old as 85.
Each policy will have named beneficiaries. These are the people who would be expected to handle funeral arrangements. They can use the proceeds of the policy in any way they choose to use it. For example, Mr. Jones may purchase a ,000 burial policy. He could name his daughter, Sally as the beneficiary. When he passes away, she might use ,000 to pay for his burial and funeral. She is free to use the rest of the money in any way she wants. So Mr. Jones could make sure that his funeral arrangements are paid for, and he can also leave his daughter some money.
Sometimes the insured person will pay for his or her own policy. Sometimes other family members, like adult children, will pick up the tab. Either way, a burial policy can be an affordable way to plan for funeral expenses. It is not the right solution for every family, but it can be a useful and affordable tool for some people.
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