Does Life Insurance Pay for Cremation?
With the rise in funeral costs, it’s valid to wonder whether a life insurance policy pays for cremation services. After all, not all life insurance policies are the same, and cremation services aren’t cheap. During times of distress and loss, the last thing a family wants to worry about is money and how they’re going to pay for funeral services for a loved one.
Luckily, life insurance can pay for cremation, but like most insurance policies, it depends on the policy and what it covers. That’s why it’s important to read the fine print of life insurance policies and make sure they cover everything you need them to.
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The need for life insurance
It’s essential to understand the cost of funerals and to make future plans for them, which is where a life insurance policy enters the picture. This type of insurance can make the grieving process a little easier because arrangements will already be made and, depending on the insurance policy, the cremation services would be paid for by the policy.
While some insurance policies will state these types of arrangements and set aside the necessary funds if there’s a passing, people can purchase what’s commonly referred to as final expense insurance.
What is final expense life insurance?
There are many factors that go into play when accessing how much this type of insurance costs, but according to Progressive, “Final expense life insurance rates start at just $20 a month, with coverage amounts from $5,000-$35,000. Term and lifetime policies are also available, so you can choose if you want your policy to last from 10-30 years or your lifetime. Your premium and benefit amount will stay the same for the life of your policy.”
As Progressive also states, families/beneficiaries use final expense life insurance for funeral and burial costs, as well as medical bills, debt, and other end-of-life expenses. While some policies might not cover the same things, final expense insurance should cover most (if not all) of the cremation/funeral services. It does depend on the policy and how much the cremation services cost, though, as that can differ based on the chosen provider.
Cremation arrangements
In terms of the cremation process itself, it’s essential to find a quality cremation/funeral provider, such as Legacy Cremation Services, to help you create a meaningful ceremony while honoring your loved one. While there are life insurance policies that cover cremation services, people should look into the different insurance policies and providers to compare costs and ensure the beneficiaries will be covered with the policy.
Alternative option
In the event an individual passes away prematurely, considerations to life insurance policies may not have been made. According to NerdWallet, term life insurance (often called pure life insurance) provides coverage for a certain time period. It is designed to protect your dependents in case you die prematurely. If you have a term policy and die within the term, your beneficiaries receive the payout. The policy has no other value.
With such a policy, you choose the term when you make your purchase. Common terms include 10, 20 or 30 years. With most policies, the payout — also known as the death benefit — as well as the premium stay the same throughout the term.
Fortunately, there are options that can help relieve some of the burden and distress for beneficiaries during these difficult times. Everyone’s needs are different, so the type of insurance policy depends on each individual. Some policies might be more beneficial to some over others, so do your due research and secure the best policy for your needs.
