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The Shortcomings of Life Insurance in Terms of Funeral Cover

Funeral costs increase by 30 per cent since 2010Compare Funeral Plans UK recently polled our members in regards to their current abilities to pay for the expenses upon the death of a loved one. 80 per cent stated that these obligations would be difficult (if not impossible) to meet while waiting for the financial payout from a standard life insurance policy. Considering that funeral costs are now seen to be rising as fast as housing prices, this is a very real concern.

Notable Differences

It is first important to point out that life insurance is much different than prepaid funeral insurance. The delay in terms of payment is perhaps the most notable disparity. Life insurance payouts will be subject to terms of probate legal considerations and therefore, the money can be tied up for weeks or even months. These funds may also be subject to taxation and other fees; diminishing the total amount received.

On the contrary, the monthly payments involved with a prepaid funeral plan can be allocated DIRECTLY towards immediate expenses such as funeral directors, transportation and other needs. There are no medical checks required and funeral insurance rates will never increase. The premiums paid are fixed and will not increase over time. This may not always be the case with life insurance policies. Additionally, variable insurance interest rates can cause frustrating to occur for those who are already on limited budgets. These fundamental differences are critical to point out.

It is obviously important to understand differences of these two very distinct policies. A prepaid funeral plans are the best way to be prepared for whatever eventualities may lie ahead.

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