Preneed life insurance policies are whole life policies that are usually offered to senior citizens. These policies typically ensure that the funeral, cremation, or burial expenses are paid first in case of the policyholder’s death. Such policies are not restricted to older people and can be bought by any qualifying person of any age group.

• The main advantage of these policies is that they help senior citizens in making sure that they do not burden their loved ones with the expenses incurred for a funeral, cremation or burial.  These expenses may be very high in some countries; even $6000 to $7000 which may create financial problems if there are dependents who are not breadwinners.
• Preneed life insurance policies are also suitable for single senior citizens who have very few close relatives or friends. In such cases it is advisable to take out a policy that ensures that a relative stranger is not burdened because of your death. In some cases the policyholder may sign a pre-paid contract with the funeral home to ensure smoother and tailor-made fulfillment of the last rites.
• Such policies can be taken out by another person who is a dependent or family member. This makes practical sense as we never know when a person may depart. Most funeral homes today offer pre-planning services. This lets you to go in and make preparations for some or your own entire funeral, down to each factor. The funeral director will provide you a price list for goods and services, which is necessary in the FTC’s (federal Trade Commission) “Funeral Rule”.
• If you choose to pre-pay your arrangements, numerous funeral directors will propose a price assurance. That way you can lock in today’s cost regardless of when your funeral is held in the future. With funeral costs only fated to go up, this is a smart preference. If your costs are not locked in and you pre-pay, your family might be required to shell out additional money at the time of your memorial service or funeral to make up the difference.
• Final expense insurance, also known as “burial” or “funeral” insurance is a life insurance policy with a small face value, such as $5,000 to $50,000, that you purchase directly from an insurance corporation. You can name any recipient, normally a family member, who would make the claim and collect the funds upon your death. That recipient would then be in charge of using the funds to carry out your desires.
• Final expense policies are either term life (which covers you for a definite time period or until a definite age, then terminates) or whole life (which covers you for the rest of your days). They are usually either simplified issue policies, for which you are asked numerous medical questions but do not have to take a medical test, or guaranteed issue, where the policy is issued to anybody who submits an application with no medical questions requested.

If you have any further points please feel free to leave a comment.