Which Is Better:
Life Insurance or Funeral Plan?
Which is better: Life Insurance or Funeral Plan?
The truth is, Life Insurance and a Funeral Plan are both equally important.
Many would disagree with us, but you will be able to decide what is best for your needs.
There is never a perfect product or one size fits all situations.
We all have different needs, wants, and goals. Therefore, a funeral plan could be a right fit for one family; another family may only need life insurance; another family may want a combination of both arranged; or a family may not need it based on their net worth.
"Funeral Plan or Life Insurance ?"
Different scenarios and factors apply that can be essential when deciding if you need a funeral plan, life insurance, a combination of both, or none at all.
Ways To Pay For A Funeral
We know for sure: at one point, we will reach the end of the road. Some call it borrowed time, some call it death.
Not to be morbid or anything, but it is the plain truth. I don’t know why most people get “iffy” talking about this subject or matter at hand, to say the least.
We never want it to happen to us, yet when it happens to someone we are quick to ask “What happened, how did it happen, and why did it happen?”
Then we catch ourselves scrounging endlessly on Facebook, Google, GoFundMe pages, obituaries, or news headlines to see the details and often we see that many are not prepared for the inevitable.
With that said, many pay for funerals through:
- Life Insurance
- Funeral Plans
- Annuities
- Retirement Accounts/Pensions
- Work Life Insurance
- Fundraisers
- GoFundMe Pages
- Raising Money through Social Media
- Family pitching in
Some might argue with me, but personally being prepared is when you do not have to ask for assistance to bury your loved ones. Many do not know, but Life Insurance Policies are very inexpensive these days.
TIP: The younger you are the better it is to buy life insurance and lock it in, if buying whole life insurance. Term life insurance policies have also become very affordable and can keep you out of a bind and even leave money to your family.
More conservative and advanced preparations include annuities, trusts, wills, and other investment accounts that can use funds for burial.
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What Are The Different Types Of Life Insurance?
Life insurance helps pay funeral costs. Common Life Insurance terms used for funeral expenses include:
- Final Expense
- Burial Insurance
- Whole-Life
- Term-Life
- Universal Life
- Annuity
What Are The Different Types Of Funeral Plans?
Funeral plans help pay funeral costs. Common Funeral Plan terms used for funeral expenses include:
- Plot and Burial Plan
- Pre-Paid Funeral Plan
- Cremation and Funeral Service
What Are The Key Differences Between A Life Insurance and A Funeral Plan?
Time to get to the “bottom-line” of this constant controversial argument: Life Insurance vs Funeral Plan.
Life Insurance and Funeral Plans both have Pros and Cons that should be considered when reaching your balance point or making a decision on which route to go.
Let’s do a “Benjamin Franklin Close” to help us make our decision.
Life Insurance
PROs
- Your Beneficiary would receive a check upon your death.
- Can have money left over to replace lost income.
- Can have funeral and burial services anywhere.
CONs
- May need to qualify, depending of which product of life insurance.
- Premium prices vary depending on age and health.
- Not Guaranteed depending on product and policy terms.
Funeral Plans
PROs
- Funeral and plot services paid for.
- Traditional for families that want to be buried or cremated in the same location or plot.
CONs
- No money left over for family to replace lost income.
- Restricted to location where purchased, land or chain of funeral homes.
- Not guaranteed on inflation costs and business staying existent.
- Limited to “packages” or “add-on’s”.
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Life Insurance vs Funeral Plan Conclusion
As you can see, there is no perfect answer to which is better: Life Insurance or Funeral Plan.
It is all going to come down to preparing for the inevitable, and choosing an option that works for you and your family.
It is also okay to have both a life insurance and a funeral plan. Many people choose this option also. Best of luck, and remember start early!
