Ron Attias is a licensed insurance broker. He has no particular loyalty to any one insurance company, so he is able to shop all major insurance carriers. This means that you always get the BEST plan at the LOWEST price. Each plan can be customized to fit your specific healthcare needs and budget.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Mar 13, 2020

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No one wants to think about it, but death is a part of life and so are funerals. But funerals can be costly, and sometimes, having insurance can help keep those costs down while still ensuring you receive the funeral you want and deserve.

Providing your loved ones with a lump sum upon your death to help pay for your funeral and associated expenses, funeral insurance also provides peace of mind that ensures you won’t be leaving your family with a cost they can’t afford.

What is funeral insurance? It is the sum, agreed upon when you take out the policy, paid to your estate when you pass away. Generally speaking, you can choose an amount between $5000 and $15,000. Of course, you need to consider whether you can cover the cost of the premiums between now and when you die.

While we never know what is around the corner, you may potentially be paying premiums for 10, 20 or even 40 more years. Also, it is important to remember is that funeral insurance premiums are usually stepped, meaning they rise over time as you age.

Funeral insurance will generally include:

  • A benefit payout: The agreed-upon lump sum payment provided when you die.
  • Accidental death cover: A lump-sum payment provided if you pass away from accidental death. This may be an in-built benefit or an add-on so check your policy.
  • Terminal illness cover: Provides the option for an early lump-sum payment made if you are diagnosed with a terminal illness, likely to result in death within 12 months.
  • Accidental injury benefit: Accidental injury provides financial support if you incur a serious accidental injury, for example, blindness, major head trauma or the loss of heating. A fixed amount will be paid out.
  • Child cover: Child cover provides a lump sum in the event that your child passes away. It also provides a payment in the event of serious injuries such as paralysis or deafness.

What to Avoid with Funeral Insurance

Of course, as with anything in life, there are some things you need to avoid. You need to fully understand what your funeral insurance is providing and what it really covers you for.

Uncapped funeral insurance premiums are one such trap. A funeral insurance policy that provides good value will specify a cap on your premiums, meaning you’ll never need to go over that amount over the life of the policy. This helps avoid paying more in premiums than your policy is worth.

Taking out insurance when you’re too young is also a step in the wrong direction. However, you don’t want to wait until you’re too old either. It’s a delicate balance that needs to be carefully considered.

Taking out funeral insurance to early may mean you pay more in premiums than the lump sum insured. Potentially, the benefit may not be worth it, especially because as you age, the premiums will rise and are likely to become unaffordable.

However, waiting until too late is also dangerous. Premiums usually rise a great deal for people over 50, meaning many people cancel their policy within the first few years if they’ve taken it out at a late stage. Any benefits of premiums already paid will no longer be available.

Finally, taking out too little or too much coverage can also be a trap. The average funeral costs between $11,000 and $19,000, yet so many people are either under-covered or over-covered. Of course, if the lump sum is too much, the balance can be used on other things. However, if you haven’t taken out enough coverage, your family could be left with a large financial burden.

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The Benefits of Having Funeral Insurance

It goes without saying that having funeral insurance means your family won’t be stuck with the financial burden of your funeral when you pass away. But there are some other advantages when it comes to taking out funeral insurance.

The coverage is provided immediately. Generally speaking, as long as you meet the requirements, you’ll receive coverage immediately. On top of this, beneficiaries can be hand-selected by you in the policy. The lump sum will be paid immediately upon your death and can be used to cover a variety of expenses.

By far, the most important advantage though is that funeral insurance protects your family from financial hardship. Losing someone we love is traumatic enough, the last thing your family needs is to worry about how they will cover the expense of your funeral while they’re trying to navigate their way through the grieving process.

What do I do now?

A lot needs to be considered before you sign on the funeral insurance dotted line. While there are expenses involved in the form of premiums, what’s undeniable is that having funeral insurance provides you and your family peace of mind that no one will be out of pocket when you pass away.

Remember, the financial burden can be quite large, and while deciding on every detail for your funeral and handling the grief, you definitely don’t want your family to be worried about how they will cover the expenses.