A Guide to Getting Death Insurance

Whilst you are still young, it is strongly recommended that you purchase a death insurance policy. Not only will you be relieved that your funeral costs and debts are sorted out but you can live out the rest of life knowing that your relatives can spend the extra time thinking about you and not where the money is coming from.

The simplest form of death insurance comes in the form of a policy completely devoted to paying all the funeral costs and that’s it. This kind of policy is referred to as a Pre-Need Insurance policy which caters solely for this need. Widely available through funeral homes and funeral directors, the only named beneficiary with this policy is either of these establishments. In this way the policy covers the funeral costs alone and cannot be used for any other purpose.

Other options of death insurance you can pick from differ from this basic package. Some policies are quite liberal and the amount that is paid out after your death can be paid to anything else, as well as the cost of the ceremony. After your death, any outstanding debts or expenses can be paid using the death benefit the beneficiary is given. When looking for these options, they will either be titled as burial insurance or final expense insurance.

The unique thing about these two types of policy is that you are entitled to name any beneficiary that you want. A friend, spouse, colleague or your children could all be picked by you as the named beneficiary. Insurers usually suggest that it is wise to discuss the policy with the beneficiary to ensure that they are clear on your wishes. Make it clear if there are any particular people or organizations that you wish money to be paid to in the event of your death. Unless you discuss these issues with the beneficiary, it is worth mentioning that they can spend the funds in any way they wish if not told otherwise. It is commonly the case that if any of the funds are left unallocated they belong to the named beneficiary.

It is recommended that if you opt for a single policy or nominate one of your children as a beneficiary, the policy is best put into a form of trust. This is due to tax issues which may affect the policy and death benefit if not within the confines of a trust. Taking out a joint policy for you and your partner is a viable option, however it should be noted that many insurers will only pay out one time and that is when the first death occurs. The remaining partner will not have any death benefit paid out once they have passed away.

When searching for death insurance policies you will find that there are two main types to choose from. Whole Life Insurance is designed to last from the moment it starts until the time of your death. There is no waiting period to contend with if you choose this option. Term Life Insurance lasts from the time a policy is started until a pre-determined end date; thus it is limited by a set period of time. If you die whilst the policy is still active, then the beneficiary will receive the benefit. If not, then the policy is simply cancelled. You will find that the premiums payable for the latter policy type is normally cheaper than the premiums for the former type.

Obtaining a policy for death insurance is a simple and easy process which can be carried out face-to-face, online or by telephone. Most insurers now have a website on the internet where application forms are available to fill in directly. It is possible to avoid having to have a medical examination or answer questions about your health with some of the policies that the insurers offer.

Putting off buying death insurance is something that we should all rectify as soon as possible. If you leave it too late then it may be too late! Having the mechanisms in place to pay your funeral costs and to pay off any debts will give you peace of mind so that you can enjoy your remaining years.