The Four Types of Funeral Insurance Premiums

we'll explain the four types of funeral expense premiums

Funerals are not cheap – oftentimes they average $9,000. This is an inevitable part of life and an expense that must be paid upfront. There’s not much time between when a loved one dies and when their funeral takes place. Luckily, final expense insurance provides that financial safety net so funeral costs are not as intimidating. Just like how you can make the choice between standard and pre-need funeral insurance, you can choose how you’d like to structure your premium payments.

Stepped Premiums

Stepped premiums build up every year. Your premiums take your age, health, sex, and death benefit size into account. Then your policy calculates exactly how much you will pay in premiums for the year.

This is a good option if you’re someone who maintains a healthy lifestyle and doesn’t have any illnesses. Your premiums will not go up as much as someone who has poor lifestyle habits.

Leveled Premiums

Rates never go up. The premium costs are decided from the very beginning, and given that you’re paying your premiums, the rates never go up. This is an option because the leveled premiums will appear more expensive than the other choices at first, but since it never changes, it can end up being cheaper.

This is a conservative approach to premium payments. This eliminates the unpredictability element that comes with paying premiums every year. You won’t have to worry about how much your premium is going to increase, because it will never increase, to begin with.

Capped Premiums

Limit-based, either by age or amount spent on policy. For example: if your policy has capped premiums where the age limit is 90, then you will never have to pay a premium again after you’ve turned 90. A policy may have a limit of $100,000, and once you’ve paid that amount over the years, you don’t have to pay premiums after you’ve reached that.

Capped premiums are a great option for someone who joins a policy very early on when they’re first eligible. If you’re in it for the long haul, this helps guarantee that you will get to a point where you will no longer have to make payments.

Payout Guarantee

This specifically applies to what your beneficiary will receive. This guarantees that your beneficiary will receive the higher of one of these two amounts – the precise amount of premiums you’ve paid, and the amount of the original insurance.

Which Is Your Ideal Type?

Final Expense Direct works with all of the top insurance companies in America. We’ll make sure we find the perfect plan for you and your specific needs, so call 1-877-674-0236 today!

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