What is the Difference Between Burial and Life insurance?
Virtually everyone is familiar with insurance policies. You've probably seen many television advertisements concerning the subject. In some cases, your parents and grandparents have discussed the details of having an insurance policy to cover funeral expenses. Determining the differences between burial and life insurance can help you make the best decision about which one to choose.
Function
Life insurance and burial insurance may seem the same at first, but they are distinctly different from each other. With life insurance, you agree to pay a preset amount of money periodically to an insurance company. At your death, the insurance policy will issue a payment to your designated beneficiary. Burial insurance is designed to prepay your funeral arrangements only and decrease the burden of funeral planning for your surviving family members.
Types
There are two major types of life insurance that are available for you to choose from. They consist of permanent and temporary life insurance policies. Some of the most common insurance policies include term, whole life, and universal. Term life insurance provides protection for anyone on a limited budget. It usually offers a payment to cover any outstanding loans or to help provide for your surviving family members. Whole life insurance will provide you with coverage for the remainder of your life. Pay the premiums in a timely manner and you won't risk losing the insurance policy. It also accumulates cash value and can be cashed in if you discontinue the policy. Universal life insurance offers more flexibility than the others. You're able to conveniently change the amount of insurance you'll need. Your beneficiaries will still receive the value of your insurance policy upon your death. Although there's only one type of burial insurance available, you may be more familiar with it's alternate name of funeral insurance. Burial insurance allows you to prepay your funeral arrangements without burdening your family members
Features
Burial and life insurance help to make the entire process of planning a funeral or covering family expenses easier. Once you've purchased burial insurance, it will cover most of the common expenses. Usually your burial plot, grave marker, cremation, embalming, flowers, hearse, and a few other things will all fall into this category. On the other hand, life insurance will provide a preset amount of money to your beneficiaries. The money received will go towards burial costs and funeral arrangements. Depending on the amount of the life insurance policy, some beneficiaries will have have extra money left over for other personal expenses.
Considerations
Before making a final decision on any sort of insurance, research it first. Not all companies provide you with the same type of life insurance or burial insurance policies. If you're only looking to cover the basic costs of your loved one or self, then consider choosing burial insurance. However, if you'd like them to have extra money to cover expenses outside of the funeral arrangements, select the life insurance policy that works best for them.
Warning
Read the fine print in whatever insurance you decide to purchase. There are usually limitations and restrictions that go along with your insurance policy. Familiarize yourself with the each detail to verify that this is the correct insurance policy for you and your beneficiaries. Not understanding all of the details ahead of time could cost your surviving loved ones much aggravation and more grief. Being fully prepared will make the entire process of planning your funeral much easier to deal with.
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