Is it much different from life insurance? Not really
By Katrina Caruso
As TV commercials keep reminding us, funerals are expensive. The most basic caskets start around $3,500, and then there are the service, the flowers…. Canadian burial ceremonies cost between $9,000 and $15,000. Cremation, while more affordable than burial and therefore the more popular option (more than 60% of Canadians choose to be cremated), can still cost anywhere from $1,500 to $4,500.
To cover these costs, many people opt for funeral insurance, so that the proceeds of their life insurance plan can be dedicated to their families’ security instead of paying for a funeral.
A type of life insurance, funeral insurance pays less than a life insurance policy, since it’s intended only to cover “final expenses,” whereas life insurance is tradionally meant to cover the loss of a person’s income when he or she dies.
Funeral insurance coverage and policies vary considerably and depend on the kind of ceremony you may want to be insured for. There are calculators online to help you figure out the costs. With a better picture of the costs associated with a funeral, you can be more informed about the type of plan that works for you.
In terms of costs, people who are 65 years old can expect to pay between $30 and $75 monthly (it depends on gender: at this age, women typically pay less), and at 75, the costs are closer to $50 to $140 a month (at this age, men normally pay less).
If interested learning whether this type of insurance is for you, it’s best to speak with a broker, who can offer a wide range of options and rates. While there’s no charge to use their services, you should keep in mind that brokers receive a commission on their sales.
Photo: iStock/GreenAppleNZ.
