Funeral Insurance
What Does Funeral Insurance Mean?
Funeral insurance is a contract in which the insurer agrees to cover the funeral expenses of the insured. In addition to the funeral costs, the policy may also cover related expenses such as the costs of the wake, burial fees, cremation charges, and grave-digging services.
Insuranceopedia Explains Funeral Insurance
A typical funeral insurance policy requires the policyholder to make monthly premium payments until they reach a certain age. These premiums may be fixed or increase annually, depending on the terms of the insurance policy. As a result, the insured may end up paying more than the actual cost of their funeral.
To address this, a similar product called pre-paid funerals or pre-need funeral insurance was introduced. This option allows individuals to pay for their funeral expenses upfront and make smaller contributions each month until the total cost is fully paid.
