Choosing between cremation and burial is a decision that entirely depends on the family of a person. In this regard, different aspects such as culture, faith, tradition, and belief are brought into the matter. One such factor which plays a decisive role in determining whether to bury or cremate the body is the difference between the cost of the two procedures.
Cremation includes the expenses of cremation urn and sometimes a crypt. On the contrary, burial involves the payment for embalmment, transportation expenses, the choice of coffin, and the opening and closing of the grave. The best way to keep a check at the costs of the two is to research your possibilities ahead of time.
Let us examine the differences between the cost of cremation and burial in detail with respect to various life insurance policies.
Difference Between Cost of Cremation and Burial Universal Life Insurance
The first final expense insurance that must be avoided at all circumstances is term life insurance. It includes coverage for a specific time frame where the policy owners have a hard time deciding how long they need it for. Consequently, if you die before the term expires, the insurance company will pay the death benefit. Fair enough! But if you die after the term expires, the insurance company does not pay. To put it more precisely, if you buy a term policy, you should better die before the plan expires!
I want to show you why it is not always a smart move to invest money in term life insurance. Several brand name insurance carriers usually seen on TV and newspaper advertisements are only limited to a certain length of coverage, usually designated to cease at the age of 80 years. So, when the term plan expires, it is going to be terminated and eventually cancelled!
With the passage of time, the situation only gets worse. Term life insurance comes with escalating premium rates that go up with many of these plans, usually within every 5 years. Many a times, it involves taking a risk. Hence, by the time you need it the most, it becomes too expensive to be afforded. So, while it may sound reasonable at 60 years, could you afford it until 65, 70 or even 75 years of age?
As a matter of fact, a great majority of people who buy term life insurance eventually end up outliving the coverage, which means that they are left with no option but to drop it under the heavy burden of costs.
We are all uncertain of when we are going to die. It could be tomorrow, or even 30 years from now. This uncertainty regarding one’s life expectancy pretty much explains why people who initially invest in term life insurance usually end up dropping it – a situation you do not want to be in! It is, therefore, necessary to devise a final expense plan beforehand so as to avoid falling into any such sort of circumstances. Without such a plan, opting for term life insurance would be nothing less than taking a life-long risk!
Let us put it in a plainer manner. At first, it might seem that you are paying less for term insurance since it is comparatively cheaper to start with. However, you might end up being crushed under the burden of a whole lot more expenses thereafter! This implies that if you are being paid a fixed income, you get one check a month. All your expenditures must fit that check, which means that you must squeeze out your budget to the minimum. Now imagine getting a premium increase on your life insurance which initially started off at $50 but has now doubled up to $100. Question is, could you manage to pay for that?
Additionally, you will eventually have to pay for a bunch of other expenses which might exceed your budget. Is it all worth taking the risk? Sensibly, not. This does not imply, whatsoever, that I am against term insurance. Picking the right insurance policy entirely depends on one’s circumstances. Most of the time, people who wish to go for a guaranteed whole life insurance do not need to go through the hassle of term policy.
2. Difference Between Cost of Cremation and Burial in Universal Life
Another life insurance plan that must be kept away from is universal life coverage. It is not always a bad policy, but certainly one that you must be cautious of. This policy is, nevertheless, a convenient type of insurance policy, provided that it is conducted with a thoughtful approach.
Universal life insurance involves flexibility of premium levels. This means that you might have a say in determining your guaranteed premiums. However, it is not as easy as you might think. There are still some rules set by your agent who design these plans and hence, you must expect a price increase.
This situation is apparent in field with people working face to face. Insurance providers offer universal life plans, for which the clients choose to pay a specific premium value set by the agent in the early years. Later in their life when they reach their 70s, they suddenly receive a massive price increase letter by the agent.
Sadly, they cannot manage to pay for it anymore, which eventually results in their outrage! This happens mainly due to the fact that the plan devised by the agent was necessarily designed to fail sooner or later. Hence, you need deep pockets if you opt for universal life insurance.
I am certainly not of the view that universal life insurance is not a convenient option of life insurance. It sometimes proves to be the best choice, sometimes not. Here’s why. Universal life insurance does not necessarily act as a final expense life insurance. In most cases, it is designed to last only until a particular age.
Make Sure Your Final Expense Whole Life Insurance Stays Within Your Budget
Some coverage is better than no coverage! A lot of loving parents and grandparents wish to support their loved ones and leave behind a handful amount of income once they die, where insurance policies seem to be the best choice. However, keeping your budget in mind is always the key, since the massive expenses that come along with such insurance policies take a huge bite out of your earnings.
Make sure that you are choosing a life insurance policy that is going to help you achieve your primary goal i.e., enough security for your family. It is only when you invest in an easily affordable policy that you breathe a sigh of relief that your family will be protected after you pass. There is, indeed, nothing worse for an insurance provider to sell a policy to someone and then see them withdraw it within a matter of 6 months.
In such cases, you might be left with no option but to surrender your whole life policy, which additionally comes with a painful surrender charge. This means that you are sent back into the situation when you had no coverage at all!