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 Life Insurance or Guaranteed Funeral Funding
Life Insurance
Life insurance is often used as a method to pay for funeral services. Many people feel that if they have life insurance, everything will be taken care of because their loved ones will have the means to carry out their wishes.
There are several considerations when funding with insurance. Unfortunately, over time, life events occur that can jeopardize the death benefit we once felt was sufficient. While insurance policies are very helpful, it is wise to ensure they are kept up to date from time to time by confirming the benefit, the owner, and the beneficiary.
We may forget that we took a loan out, thus reducing the death benefit. Policies sometimes lapse due to other economic needs requiring our attention. Confirm your policy is not just an accidental policy, or a policy that terms out at a certain age. Ensure that over time inflation has not eroded the value and that it will still provide that for which you have planned.
If your policy is assignable, you may want to discuss your funeral/cremation expenses at the funeral home. You may want to discuss the benefits of assigning your policy to the funeral home and how to protect the funds for those purposes.
While insurance is certainly a way to fund funeral expenses, it is important to understand that these funds are not accessible at the time of need, resulting in out of pocket expenses that could be costly. Life insurance provides funding, but unless you make your wishes known, your family may not necessarily know, or agree. It is important to pre-plan your final wishes, as much as it is important to fund your final wishes.
Guaranteed Funeral Funding
While life insurance can provide funding, pre-need or pre-arrangement contracts combine both funding and the arrangement.
Pre-arrangement contracts outline the terms and conditions of your purchase and your cancellation privileges. All pre-paid funeral contracts in Ontario are governed by provincial regulation and monitored by the Bereavement Authority of Ontario. When you invest in a funeral pre-arrangement, the funds are registered under your name and only redeemed with interest earned at the time of the funeral or at your written request.
A pre-paid contract always earns interest. The interest earned on the fully paid contract is designed to cover the cost of inflation. If the interest earned exceeds the rate of inflation, the excess funds go back to a beneficiary or estate. Investing in these convenient financial products helps to reduce the emotional overspending and overall stress on loved ones in a time of special need.
Planning ahead can be very comforting because it gives you the opportunity to make an informed decision about your funeral and cemetery services and the form of memorial you prefer. With time on your side, you can relax and give real thought to the details of your arrangements.

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