Funeral expenses: 5 ways to save with insurance
Faced with the escalating rates of funeral costs, it is more prudent to anticipate them during your lifetime in order to avoid the burden of debt to your loved ones. There are several ways to go about this using insurance.
Funeral expenses insurance
Funeral expenses in Quebec vary between $ 2,500 and $ 10,000, or even more. For a family with modest incomes, a sudden death could therefore lead to serious financial difficulties, especially if the deceased has not contributed enough to the Pension Plan.
To prevent your loved ones from having to take care of your funeral preparations later, it is possible to pay them in advance by taking out a pre-arrangement with a funeral home to which you will pay a monthly sum for several years. The amount depends on the services you wish to receive: cremation or burial, cremation for exhibition, etc. Please note, however, that this type of contract does not generally include the costs of a columbarium.
Permanent life insurance
If you have good insurability, you can get a permanent life insurance contract with an attractive death benefit for about the same monthly contribution as the previous option (pre-arranged funeral). The advantage of this alternative is that once the funeral costs have been deducted, the rest can be donated to your loved ones without taxes.
So if you want to leave an inheritance or finance the education of your children / grandchildren, life insurance is the best option. For a couple, it is even possible to purchase life insurance together with payment on the first or second death to save on premiums.
Term life insurance
More affordable than permanent life insurance, the term plan allows you to purchase insurance by setting the amount and duration of coverage. If your primary goal is to anticipate funeral expenses, you don't need to pay the often high premiums of a permanent contract.
There are flexible plans over 20 years, 25 years or more depending on your financial needs. If you have contracted credits, opt for a contract period covering their total repayment to be reassured.
100-year term insurance
If you want to be insured throughout your life, you can buy 100-year term life insurance that gives you the flexibility to collect the money if you live to 100 years. A part of the sum thus obtained can be set aside for the funeral and the rest can be invested elsewhere or left as an inheritance.
Term life insurance at $ 5,000 to $ 10,000
Insurance contracts can be purchased in the amount of $ 5,000 to $ 10,000, more than enough to cover funeral costs. The cost of contributions is generally low, but make sure that the premiums are guaranteed to avoid unpleasant surprises. The advantage of these term life insurance contracts is that you can reinvest the money in whole life insurance with attractive premiums in order to increase the sum insured, even if you are no longer in great shape (the state health insurance generally impacts the cost of insurance).
Now you know that it is possible to take advantage of insurance to guard against the vagaries of life, but especially to secure the future of your loved ones once you are no longer by their side. The key is to identify your needs in order to make a well-considered decision to avoid regrettable investments. If necessary, do not hesitate to call an insurance broker who can guide you in finding the best coverage.
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