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One of the most expensive "final costs" involving death is for a funeral. It's important to plan your funeral expenses so that a loved one doesn't get stuck with the bill.
Life insurance coverage can pay for funeral expenses if the policy is specifically written that way. Nonetheless, if you just name beneficiaries, they are under no legal obligation to pay for final costs. In fact, they can spend the money any way they choose. Life insurance policies typically pay a lump sum to survivors named in the policy.
It's possible, however, for unexpected Medicaid bills and other debt to delay payouts. Without a will or life insurance plan, a court will decide how your assets are distributed and payments are made to family members.
Named beneficiaries are not required to carry out your financial wishes after your demise, so you need to choose beneficiaries carefully. It should be people who have proven to demonstrate fiscal responsibility and care for others if you expect them to contribute to your funeral costs. Relying on beneficiaries to cover funeral costs is not always the best strategy for honoring wishes of a deceased policyholder. It's also important to notify beneficiaries of your policy since there's no guarantee they'll receive the money if they are unaware of it.
Following your demise, it's possible for your estate to be tied up in court or perhaps the insurer is delaying the payment due to administrative errors. Delays can cut into funeral costs, causing the family to choose cheaper alternatives.
The terms "final expenses" and "burial insurance" are interchangeable for a life insurance policy that specifically lays out how it will cover burial costs. Another name for it is "modified whole life insurance." It covers the costs of a casket, flowers and an officiant who leads the event. But your beneficiaries may still have final say on how the funds are spent.
The most reliable way to make sure your policy pays for funeral costs is to set up a pre-plan that directly pays a funeral home. It's helpful to plan your funeral with your family and a funeral director. This method will ensure that funds will not be spent randomly and that entire funeral costs will be covered. It will make your plan more definitive, which will relieve loved ones from worrying about costs.
It helps to plan the type of funeral you desire, such as whether you want it to be a small or large gathering. The key to ideal funeral planning is to work with insurance and funeral professionals who are able to explain your options. Setting up a clear funeral plan while you're alive is the best way to ensure you are remembered in the way you want.
Before you decide on life insurance coverage, it's imperative to know what will happen with the hard-earned money you pour into it. Think about your beneficiaries carefully so that your selections are people you can trust to fulfill your final wishes. Contact us at Anderson Insurance Affiliates for more information on getting the right life insurance policy for you and your loved ones.
