With final expenses, I'm assuming either life insurance or your personal savings (of course, dictated by a will as you won't be alive) will pay for your final expenses, assuming your spouse or someone else isn't paying for your funeral. Anyway, what is the wisest decision? Are there other options?
Memorial plans are pre-need insurance plans that are used specifically to pay for the insured's funeral expenses. If you're planning ahead and want to have significant control over your body's final moments on earth, it's a good plan to have in addition to a life insurance which would rightfully be under the full control of the beneficiaries. Our country offers death and funeral benefits as part of its social security benefits to members. This should cover a good portion of funeral expenses for average people. However, this doesn't include the interment place. For us, the best option here is to buy a small lot at a private memorial lot where the family and relatives can visit the tomb conveniently anytime. Interment at public cemeteries is not a good option because it needs constant renewal. Sometime in the future, one may lose all relatives and no one will be left to pay for the renewal. Remains found in abandoned or unpaid tombs will be dumped somewhere. Sad, isn't it?
Four years ago, I bought a 16 years life insurance plan. At that time, I also created a saving account in my bank. Currently, I have $1500 in my insurance product. However, I don;t even have $500 in ,my saving account. The premium you pay for your insurance is a mandatory saving, however, saving account is voluntary saving. Voluntary saving does not work.
It won't hurt to have both life insurance and a savings account since they are both different but serve the same purpose in life.
I believe that the life insurance would be the better option for this type of situation. The insurance plan would ensure that there would be funds available to cover your final expenses. A savings plan may not necessarily guarantee that there will be funds available at the time of death because the saver may deplete the funds at any time he or she may wish to because unlike the insurance plan, the savings may not be subjected to any type of control which would govern it's stability.
Nice point. I also agree that life insurance has a guarantee compared to personal savings. Since you control your own savings, there is a high chance you will be tempted to use up all your savings before you achieve your goal for saving. Life insurance are strict because you have to obey the contract and policies that come with it. From your question, I can say personal saving is more economical because you will be sure of the amount you saved and will have also indicated on the will what you will want to be done with it. I hope to find out other options too.
That's true, however, the question is whether you can manage the finances. If you are already paying big amount as a premium for your insurance plan, a regular saving becomes impossible.
Both have their pros really, with saving money, you can always fall back on money for a rainy day. The problem is however, how much money you will have to fall back on and if it is enough? I personally think to protect yourself from financial related issues in the future and just to be safe, you get insurance.
It's true life ins. is one of your best investments. You see if someone took out a $100K life ins. today and that person unfortunately, passed today for the one day payment after the ins. co. receive's the death certificate and other forms, the beneficiary will get the ins. benefits. You got to read the small print though and make sure you know what you are signing and paying for. No matter what the ins. co. will not pay the beneficiary the benefits until the forms and death certificate is received by them which is usually a month after death. When you go to the funeral home and do not have a funeral plan with them, the funeral parlor want payment as soon as the plans are made...thus you got to have both a funeral plan and life ins. for expenses your executor or executrix will handle. Be sure to have a will for your immediate things need to be seen too aside your online accounts. You got to plan and best to plan way before the time comes when you need the plan. Discuss things with your executor or executrix...don't have one...get one, you'll need them. By the way, funeral plan costs do go up too.
To select from life insurance and savings, well I don't have to do that for I am having both of them. I have my life insurance and at the same savings. I know that both them are important.
Taking a life insurance is better than just keeping your money in the bank since the life insurance policy earns more interest that you will receive together with all the money you have paid upon maturity. So let’s say the duration of the installments is 5 years, you are insured during that period. However, upon maturity that you get all your money and earnings, you are not insured anymore. A caveat – be discerning with the insurance company for there are insurance companies that close shop after a year due to bankruptcy.
Both are necessary depending on the requirements. Life insurance is a must, especially for that person who's the breadwinner of the family. And, according to me 'term insurance' is the best kind of life insurance where you give a lump sum amount every year and your family gets an amount in case of unexpected occurrence. However, this kind of insurance is economical, but you do not get any monetary return, only your life is covered. So, then you need a saving of some other kind apart from life insurance for future. There are different kind of saving schemes available depending on countries. You can choose any one of them based on your financial conditions.
I think we cannot compare the two. I have life insurance because I am paying a house or else I wouldn't have one as I see it as a unnecessary expense. At the same time, if I die, the house will be paid for my kids and wife, so that's something worth paying for. As for saving, I always try to save, I don't make unnecessary expenses!
