I am single, no kids. I want to purchase an insurance policy to cover funeral and burial costs so that my family doesn’t have to worry about it when the time comes. How do I go about doing this? What do I need to know? What do I need to avoid?
What’s the point? Hopefully you’ll have some savings when you leave this planet, right?
It’s probably far better off saving the premium money you’re paying into a burial expense insurance policy and building up your assets/savings.
You can talk to a funeral home. They will sell you the services in advance.
Any insurance agent will also be more than happy to offer you a policy of some kind.
In either case, you won’t likely end up spending less than the cost of the services.
I Agree with Rumer Watkins.
If you’re really concerned, you could buy a small life insurance policy (10,000 or so) that should more than cover funeral expenses. Depending on your age / health, that should be affordable enough. And most funeral homes will simply allow you to assign the proceeds of a policy to them, or something like that (I seem to recall that was an option when my mother died, though we just paid up front so I don’t know what the details would have been).
There are prepaid funeral plans but that’s going to basically require you to pay for the funeral up front and I don’t know how good a deal they are; you’d be better off putting that cash aside yourself.
Savings and assets are wonderful, but they can be eaten up by medical costs and the vagaries of the market. Also, depending on the OP’s specific circumstances, assets might be tied up in probate and there are always expenses involved in settling the estate, such as paying off debts and taxes. Also, some greedyguts relative may try to lay claim to any cash or assets. A burial policy, on the other hand, pays off quickly and most funeral homes accept it as payment. The proceeds are also tax-free.
Assuming the OP is young and healthy, a small-value burial policy shouldn’t be that expensive. You can talk to an insurance agent, who will lay out your options. At minimum, you want something with a guaranteed death benefit as opposed to a variable policy, which is tied to the market.
I’ve heard that pre-paid plans are no guarantee of services, that’s why I’d like to be able to have the cash available to the fam.
Yeah, I agree that hopefully I won’t kick off for another 30 years. By that time, of course, the situation will be moot as I’ll have assets then. I have no assets now. I’m concerned if something should happen to me in the very near future (say five years).
ETA: MsRobyn, that sounds like what I’m looking for. I want funds to be used expressly and solely for funeral costs.
Insurance policies don’t exist if their (actuarially expected) payout for a given policy exceeds what they can recover by a charging of premiums and compounding the interest. For a relatively minor thing like this you’d be better off saving your money and investing it yourself IMHO.
Insurance is really only warranted when a massive expense can cripple you financially, not for mickey mouse stuff where you can basically self-insure yourself with no problems.
I would also expect that many states have a provision in their probate codes that paying for a decedent’s burial expenses takes superpriority over even the debts of a decedent (not sure on that, but it would make absolute sense)
If I die sometime in the next two years (and maybe the next five), though, Rumor there will NOT be funds for this. I’m currently paying off debt but am also considering going back to school (so, limited ability to save during that time). Again, I’m not talking long term. And, of course, I have no idea the costs of such a policy. But that’s the point. To hedge my bets that nothing will happen to me and this will be moot.
But, God forbid, if something does happen to me before I have funds saved, I do not want my family to have to pay for those costs.
Which is fine if the OP lives for the next 30 years and regularly saves. If, however, he gets hit by a truck next month, his family is stuck – exactly what he’s trying to avoid.
And in the two states where I’ve had family members die, there’s no law that puts burial expenses ahead of any other debt. You can bet, though, that the funeral director will insist on payment at the time of service.
so you’re basically going to be paying into a policy in perpetuity hedging against the chance that you may die tomorrow, until such a time that you’ve paid into the policy an amount equal to the benefit you’ll derive.
you’re being a little too morbid and unrealistic here. what are the odds of this?
but by all means, talk to kunilou - an apparent insurance salesperson - if you so wish.
Yes, and if he gets into a bar brawl tonight and punches someone out and renders them quadraplegic, he’ll have a judgement lien placed against him for his battery and he’ll be in hock to the quadraplege for the rest of his life. maybe he should take out personal liability insurance while he’s at it.
face it - the odds of what the OP is contemplated actually happening is extremely low and it would be a waste of his money to buy an insurance policy to hedge against this extremely low occurence.
And…
Michigan Compiled Statutes:
700.3805 Priority of claim payments.
Sec. 3805.
(1) If the applicable estate property is insufficient to pay all claims and allowances in full, the personal representative shall make payment in the following order of priority:
(a) Costs and expenses of administration.
(b) Reasonable funeral and burial expenses.
© Homestead allowance.
(d) Family allowance.
(e) Exempt property.
(f) Debts and taxes with priority under federal law.
(g) Reasonable and necessary medical and hospital expenses of the decedent’s last illness, including a compensation of persons attending the decedent.
(h) Debts and taxes with priority under other laws of this state.
(i) All other claims.
Illinois Compiled Statutes
(755 ILCS 5/Art. XVIII heading)
ARTICLE XVIII - CLAIMS AGAINST ESTATES
Sec. 18‑10. Classification of claims against decedent's estate. All claims against the estate of a decedent are divided into classes in the manner following:
1st: Funeral and burial expenses, expenses of administration, and statutory custodial claims. For the purposes of this paragraph, funeral and burial expenses paid by any person, including a surviving spouse, are funeral and burial expenses; and funeral and burial expenses include reasonable amounts paid for a burial space, crypt or niche, a marker on the burial space, care of the burial space, crypt or niche, and interest on these amounts. Interest on these amounts shall accrue beginning 60 days after issuance of letters of office to the representative of the decedent’s estate, or if no such letters of office are issued, then beginning 60 days after those amounts are due, up to the rate of 9% per annum as allowed by contract or law.
2nd: The surviving spouse’s or child’s award.
3rd: Debts due the United States.
4th: Money due employees of the decedent of not more than $800 for each claimant for services rendered within 4 months prior to the decedent’s death and expenses attending the last illness.
5th: Money and property received or held in trust by decedent which cannot be identified or traced.
6th: Debts due this State and any county, township, city, town, village or school district located within this State.
7th: All other claims.
Um, no. Where are you getting this “into perpetuity” shit? When I have funds saved that meet the amount of a cheap funeral, then I cancel the policy. That could be in two years, it could be in five depending on what decisions I make.
Of course the odds that something will happen to me in the next five years are low. But not zero, which is the point. There are no assets to pay for a funeral. There won’t be for at least two years. Even though I’ll be dead, I do NOT want my family to have to pay for a funeral.
If you don’t agree that this is a good idea, fine. But note the forum, and remove yourself from this thread. I’m not asking for opinions, I’m asking for facts on how to make this happen.
yes. and then you have thrown away your money. why not save it instead?
and bucko, you did indeed ask for an opinion:
On the specifics of a policy. Not on whether YOU think it’s a good idea.
That’s nice. Do make yourself clearer the next time lest people actually attempt to dissuade you from a stupid action.
That’s nice. DO try to read for comprehension (that everyone else seemed to get but you) instead of injecting your agenda into the thread. Plus, I clarified early in the thread and it was YOU who STILL couldn’t get it that I wasn’t planning on paying for a burial policy when I’m 60.
Mamma Zappa feels slighted.
Well, I’m bet she’s sure glad you here to protect her from herself.
Well you’re the one misinformed about who thought what about what you were asking for in this thread.
Ooooo, gotcha! Yes, Rumor, you’re the king. You’re the king of gotcha.
(But your still the one who missed post #6 and #8.)
You win! Congratulations. Feel better? Got what you need? Oh, honey, you’re right. You’re so right. Thank you for your opinion. I’m sure you’ll sleep well tonight knowing that you saved me! You’re my hero!!!
(Now, please also note that Mama** Zappa** both said to save AND answered my on a policy. Good GOD, how am I ever going to resolve this inconsistency???)