Preneed Insurance

Preneed insurance policies enable the policy holder to customize his/her funeral arrangements, prior to death by paying for the burial products/services. The policy enables the person to customize his/her funeral arrangements. A funeral insurance policy offers a variety of products such as a hearse, burial plots, vaults, funeral caskets, urns, flowers, digging and filling the grave, grave markers and cremation.

Need for Preneed Funeral Insurance

The usual practice of arranging for a funeral was via a trust. An approximate amount was set aside to cover the costs associated with a burial. The concept of funeral or burial insurance became popular because of legal complexities associated with the setting up of trusts. Another reason for the rise of this type of insurance is the rising cost of burial/funeral services. The National Funeral Directors' Association (NFDA) has assessed that the interest of people in planning their funerals in their lifetime has increased over time. The average expense for a regular adult funeral ranges from $4,500 to $5,500. About one-third of that involves the cost of the casket only. Even more, an in-ground burial can additionally cost another $2,400.

People who avail of forethought burial insurance feel the need to pay for their own funeral/burial services/products during their own lifetime. This is largely done, so as to avoid troubling their near and dear ones with the expenses and efforts involved in arranging for the funeral services post death, while dealing with the emotional trauma of a loved one having passed on.

A number of insurance companies have entered the burial insurance market. The increasing costs associated with a graying America has given a kick start to these types of insurance policies. Many senior citizens now have the resources to plan for their eventual death in advance. Many experts feel that buying such an insurance policy should be an integral part of an individual's financial planning process. The policies offered by companies offering these insurance policies are largely individualized with the cap being determined by an individual's wallet. There is no limit to the quantum of customization individuals can opt for.

Before rushing off to buy such an insurance policy, people should find their state's rules/regulations regarding pre-need insurance. Make sure that one's family and lawyer are in the loop. You must also find out details, such as the consequences of policy cancellation by the subscriber and understand how much of the plan value would be received in death benefits. Be sure to check the licenses of the company, its agents and the funeral director.

Selling Funeral Insurance Policies

Selling such an insurance policy isn't an easy thing, as death is something morbid, which though inevitable is something most people don't like being reminded of. Before becoming an insurance agent for burial insurance, the agent needs to understand the requirement of his job. An agent attempting to sell something as sensitive as preneed insurance needs to understand that this product is unlike a regular insurance cover. He would need to sensitize himself first. Convincing people to buy such an insurance policy is easier said than done. A thorough understanding of the prospective buyer's financial worth and their funeral/burial aspirations is required. People must be convinced that it is worthwhile to plan for death when alive, so that they get the burial service they desire with minimal arrangement related inconvenience to their near and dear ones. Over-aggressiveness in trying to sell such an insurance policy must be avoided at all costs. Prospective buyers must be told of all aspects associated with the policy that they decide to opt for. Customers must also be advised on whether to go in for a lump sum payment or installment payments depending on their needs and financial position. The insurance agent must guide their clients on all aspects of the paperwork involved.

This was some information on preneed insurance. If you are planning to take a preneed burial insurance policy, make sure that you get it from a reliable insurance company.