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November 8th, 2018
As you consider options to provide for your loved ones after your death, you may be wondering if funeral insurance is right for you, or whether you should rather opt for a more comprehensive life insurance policy. Answering the question of which insurance is better, you need to understand the difference between funeral insurance and life insurance.
What is a funeral insurance? Funeral insurance policies are generally designed to cover funeral expenses and most often pay benefits directly to funeral homes. The advantage of purchasing funeral insurance is that many of these policies lock in today’s prices for funeral costs.
Keep in mind that there are several different types of funeral insurance policies available and you may need assistance covering additional expenses like cemetery costs, flowers, and other expenses that might arise. Another question to consider is when to get funeral insurance.
What is a life insurance? Life insurance policy proceeds, on the other hand, are paid to the beneficiary of your choice and can be used not just for funeral costs, but for any final expenses your loved ones may need to pay. In addition to funeral costs, your final expenses may include medical bills and/or credit card debt.
> Medical bills If your death comes after an illness or accident that requires medical care, those costs can add up quickly, placing a strain on your loved ones’ own financial situation. Depending on your health insurance coverage, there may be some hefty out-of-pocket costs that could be passed on. Life insurance can cover these unexpected expenses.
> Credit card debt Unfortunately, your spouse or anyone who co-signed a credit card or loan with you can end up owing your outstanding debts. Life insurance can also cover an unforeseen credit card debt and therefore prevent the collapse of your family’s financial budget.
Next steps When choosing funeral insurance or a life insurance policy, it’s important to consider your budget and the needs of your loved ones.
If you would like to discuss your own situation and understand the best options for your insurance, speak to a First Super Financial Planner. To arrange a call at a time to suit you, contact the Member Services Team on 1300 360 988 or complete the online form.*
Article courtesy of MetLife, First Super’s insurance partner. For more details about First Super’s insurance options visit the website.
* Financial planning is provided by Industry Fund Services Limited (ABN 54 007 016 195, AFSL 232514) (IFS) or an IFS Authorised Representative.
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