Do You Actually Need Funeral Insurance?

I have been thinking about my own funeral.

I don’t want an elaborate coffin, embalming, a chapel service, flowers or a procession of funeral cars. I would prefer a simple direct cremation, followed by whatever informal gathering feels right for the people who care about me.

That led me to an important question:

Why would I insure myself for a funeral I don’t actually want?

What does a direct cremation include?

A direct cremation takes place without a formal funeral service beforehand. Although it involves more than simply transporting a body to the crematorium, the essential arrangements are relatively straightforward.

They generally include:

• Collecting and transporting the person who has died

• Care and temporary storage of the body

• A simple cremation coffin or suitable container

• The necessary medical and cremation paperwork

• Approval from the medical referee

• The crematorium fee

• Returning the ashes to the family

There is no legal requirement to add embalming, a viewing, an expensive casket, flowers, a chapel, a celebrant or ceremonial vehicles.

These things may be meaningful to some families, but they are choices—not a measure of how deeply someone was loved.

What could funeral insurance really cost?

Funeral insurance can provide reassurance when someone has no savings and does not want their family to find money at short notice.

However, reassurance does not always mean good value.

Depending on the policy, premiums may rise as you grow older. You may have to continue paying for the rest of your life, and if you cancel because you can no longer afford the premiums, you might receive little or nothing back.

Even a premium of $30 a week adds up to:

• $1,560 each year

• $15,600 over ten years

• $23,400 over fifteen years

It is possible to pay more in premiums than the policy eventually pays to your family.

Before purchasing funeral insurance, ask:

• Will my premiums increase as I get older?

• How long must I continue paying?

• Is the benefit fixed, or will it rise with funeral costs?

• What happens if I miss payments or cancel?

• Is there a waiting period?

• Could I eventually pay more than my family receives?

What are the alternatives?

Instead of funeral insurance, some people choose to put money regularly into a separate savings account. Others already have sufficient life insurance or money within their estate. A prepaid funeral arrangement may also be an option, although its terms and exactly what it covers should be checked carefully.

The right choice will depend on your finances, health, age and the kind of farewell you actually want.

Start by deciding what matters to you. Then find out what that particular arrangement is likely to cost.

Planning your funeral is not morbid. It gives you a voice in what happens, removes uncertainty for your family and may prevent them from spending money on things you never wanted.

A meaningful farewell does not have to be an expensive one.

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