No one ever wants to think about when they might die, so the question of, “Should I have life insurance?” often brings up that very point. But anyone who is married or has children should certainly get life insurance to help protect their loved ones financially.
A life insurance policy is meant to help your family in case of emergency, specifically in the event that you die. While you want your family to be taken care of after you’ve gone, the payout will also help them pay for your funeral expenses, which can be higher than expected.
Buying insurance can be a complicated – and relatively boring – topic, but buying the right policy can be very helpful to a family.
Whole or Term Life Insurance
Many people get confused as to which life insurance plan they should purchase. The difference between these two types of insurance policies is that whole life insurance is a lifelong policy (over your “whole” life) with the sum being invested for tax-free cash.
“Term” life insurance is a policy that pays out death benefits over a specific period, but offers fixed premiums that you would pay every month, quarter or year. The premiums for term life insurance are much smaller than whole life insurance.
Most financial advisors believe that term life insurance is the better route, while you place other monies into other investments with better payouts than whole life insurance.
How Insurance Can Help With Your Funeral
Some people buy something called “funeral insurance,” which is different from both life and term life insurance policies. Funeral insurance policies are specifically purchased to help cover funeral expenses, and they are generally paid directly to funeral homes. The good thing about buying funeral insurance is that you can lock in the cost of a funeral with today’s prices, which can average around $8,000. That way, if you end up dying 10-20 years from now, you’re actually saving by not having to pay expected higher funeral costs in a decade or two.
These policies are generally cheaper than standard life insurance policies because the payouts from the latter can be used for things other than the funeral, like medical bills, or a spouse’s credit card debt. But even a single person, without a spouse or children, might consider getting funeral insurance in order to keep other family members from having to pay.
If you have any other questions about how a life insurance policy can help you when pre-planning your funeral, call The Gardens of Boca Raton Cemetery & Funeral Services at (561) 989-9190 or contact our partners at the Boca Raton Funeral Home at (561) 852-4332.