A Case Of Funeral Insurance, Do You Need This Financial Product?

There are various types of insurance policies. The policies aid in certain functions such as offering security against risks that may occur. The various types of insurance policies cover variant fields. That is there are policies include marine insurance to property insurance. The various types of policies offer different functions. One policy that has been the source of debate is the funeral insurance policy. The policy is available in some insurance agencies. The policy has created a lot of talk on the necessity of the product and the alternatives that could be in use to replace it. It is therefore important to comprehend the results of this product.

Financial experts have argued that the taking of the policy is a financial loss. This is mainly because of the demands that come with it. Many people often ignore the advice from the advisers and choose to purchase the product. This however is suicidal due to the various expenses that one would incur as they purchase the product. The majority of people who take out this policy often feel the urge to ensure that their next of kin and the family members are secure after the insured has died. However, certain restrictions come with the purchase of this policy this noble venture.

Some of the additional expenses that an insured incurs include the payment of high premiums. Unlike other policies that offer reasonable premiums, the funeral insurance policy offers high premiums, which do not base on any form of calculation. The policy also does not allow the pre calculation of the premiums thus inhibiting the insured from proper planning. The compensation period is always longer in terms of the funeral insurance policy. Even though the policy offers some advantages, which include the provision of financial security among the relatives and provision of burial money, it also offers some disadvantages such as the high financial burden that the insured people suffer.

The policy also comes with certain other disadvantages such as the payment of high rates in terms of premiums. This is the main disadvantage of taking out this financial product.  In addition, other additional disadvantages accompany this product. The funereal insurance policy offers some form of security to the people taking out the policy however, it does not offer benefits such as the other policies related to life insurance. The other forms of life insurance offer more advantages than the funeral insurance policy. There are also other alternatives to the funeral insurance policy. These alternatives offer similar services as the policy as but with slightly more advantages than the funeral policy.

Some of the alternatives to funeral insurance policies include

Savings Accounts

The use of savings accounts is important. The practice enables people to save money, which in turn earn them interests on the deposits. The use of the savings accounts ensures that the person gets to save money there by ensuring financial security in the case of the person’s death. Various banks offer good deposit rates for the savings accounts. This also ensures that one saves a lot of money. That is through the savings accounts one does not incur any form of charges. This is unlike the funeral policy that ensures that the people pay premiums.

Life Insurance Policies

This is the most appropriate alternative to the funeral policy. Since there are various types of life insurance policies, the clients often have a unique choice. One thing that separates the funeral policy from the life insurance policy is the provision of low premiums to the clients. In terms of the general life insurance, one also gets compensation right after the period of insurance is over. The whole life insurance also offers the best in terms of payment of premiums as well as the period of compensation. Instead of choosing the funeral insurance policy, the selection of either the different type of life insurance policies ensures that the client gets to save on money for the premiums.

Financial Estate

This allows the clients to receive burial arrangements easily with the financial estates. They assist in the payment of the expenses. This is an alternative to the funeral policy. The policy would charge high premiums but through the estates, one could easily pay the expenses and still save money.

Thus, it would suffice to say that the taking of the funeral insurance policy is not a good financial decision. This is due to the variety of disadvantages that it brings to the insured and his relatives. Incase of a default in any of the payment of the premiums, the clients do not get their compensation thereby hindering the burial process. There are however, the above stated alternatives to the funeral policy, which offer a much better results than the latter. The alternatives are more preferable than the funeral insurance policy. This is due to the advantages that they offer to the clients.

Disclaimer: Finance Product Reviews is an independent website. Although we may have advertisement relationship with financial institution we review, they do not influence our decision or rating of products. Contents of this site are not provided by any financial institution, banks, brokerages or credit card issuers. Opinions expressed here are author’s alone and are not reviewed, approved or otherwise endorsed by the product owners.