When it comes to choosing insurance, the decision is never easy. Most of the time, people will consider life insurance far before burial insurance because they think that burial insurance seems too grim. But don’t let the wording put you off as it can be a wonderful deal.
Life insurance vs burial insurance (also known as funeral insurance), is a necessary comparison considering that there isn’t a whole lot about it online. You may be confused as to which one is best for you and which one will give you the most in life and in death. The medium is that they both provide you with a lump-sum benefit in the event of terminal illness, or of course, death.
However, they both offer entirely different benefits that can heavily impact your decisions based off of which one is best for you. Read on and gain an insight into life insurance vs burial insurance.
In the event of your inevitable death, life insurance pays your family a lump sum in the event of your death. This can be used to cover any end-of-life costs and funeral costs including excess debt and ongoing living expenses for your family. You will also be able to purchase extra coverage options which can be added on.
Life insurance can also cover accidents, injuries, and illnesses.
Pros and cons of life insurance
Let’s take a closer look at the pros and cons of life insurance.
- Some policies also cover you in the event of injuries, illnesses, and accidents
- Your beneficiaries will be able to spend your benefit as they see fit
- Far more affordable compared to burial insurance
- You may need to go through a medical exam which is not ideal if you have health issues or are aged
- If your health condition is not ideal, you will likely pay more for coverage
- Your benefit may be received after your funeral
Burial insurance is the perfect way to cover your burial/funeral expenses at the end of your life. The benefit must go towards a range of funeral expenses. As opposed to life insurance, burial insurance only covers your burial expenses, not other end-of-life expenses that may need to be paid off.
It is definitely something to be well aware of. As long as your premiums are paid, your policy will remain in effect until you pass away.
Pros and cons of burial insurance
As with anything, the pros and cons must be considered. So, let’s take a look at the pros and cons of burial insurance.
- Longer expiry date than life insurance
- As soon as the claim has been approved, your benefit will be processed
- You usually don’t have to undergo a medical exam
- You may live a long life which means that you will also end up spending an entire fortune on your burial insurance cover until you eventually pass
- You may pay far more in premiums than you would on term life insurance
A closer look at life insurance
To understand your coverage, life insurance essentially covers you for accidents, illnesses, injuries, and of course death. This all depends on what policy you take out though, so keep that in mind. The main difference between life insurance and burial insurance is that with life insurance you will receive a lump sum payout that can be used for many purposes other than a funeral whereas burial insurance pays you a sum for your funeral expenses only.
A closer look at burial insurance
Apart from the few obvious similarities, burial insurance actually varies significantly from life insurance. Here’s why. Burial insurance is basically a fund or pre-payment for your future funeral expenses. Aside from the benefit that covers your funeral expenses, it doesn’t allow you to pay for anything else that isn’t directly related to your funeral or the expenses associated.
Why should I consider either of these options?
You may have many questions frequenting your mind as both of these options are so similar yet so different. So, why should you consider either of these options? Whether you choose burial insurance or life insurance, here are some benefits associated with both options.
- Peace of mind- Nobody wants to deal with stress, especially stress that could have been avoided. That is why taking out insurance can provide you with serene peace of mind so that you don’t have to spend time stressing about your loved ones covering expenses after you pass away. You will no longer have to worry about your family’s future.
- Spare your loved ones from financial burdens- After you’re gone, you obviously won’t be around to cover your own funeral expenses, so of course, that all falls on your beloved family. They will already be dealing with grief, trauma, and possibly other, more severe emotions. The last thing they need to deal with is massive financial burdens on top of the emotional turmoil. With either one of these insurance options, your family won’t have to foot the bills associated with your funeral so they can put time into their healing process instead of worrying about money.
- Your family will be able to adjust faster- When someone you love dies; healing is a necessity. However, your family won’t be able to heal as fast or as well if they are stressed about money on top of it all. When you have insurance to cover you after death, your loved ones will be able to adjust to your absence faster without having to worry about debt as well.
Life insurance and burial insurance both have their pros and cons and at the end of the day, it is up to you to decide on what is best for you and your family after you’re gone. Whether you want a lump sum payout that goes toward all of your end-of-life expenses (life insurance), or you are more attracted to something that only covers your funeral costs (burial insurance). Whichever one you decide to choose, make sure that you continue to do your research and even try talking to a professional.
Hey, I am Raj. I am the owner and content publisher at Financenize. I have completed my education till intermediate school and after that turn to a full-time blogger and content writer. I usually share the quality information for the readers in Financenize, which helps the small business, individuals and entrepreneurs and the information I share makes their task more manageable. I am expert in analyzing the current situation and deliver a profitable period to the extent. You can find me on various social media handles online.