Funeral insurance is too expensive and covers too little
The funeral insurance reverses the coverage amount off at death of the insured. In practice it appears that the sum insured is often too low, despite the high premium in the course of the years.
The amount of the premium for the funeral depends on the sex of the insured person, the height of the insured amount and the maturity of the premium. If this insurance is terminated at a young age, the premium is relatively low. In later life this policy still closes results in a high premium.
Why a funeral insurance?
Everyone will die once, only the time of death is uncertain. Funeral insurance is concluded to cover the cost of the funeral.
Why is a funeral insurance more expensive than a term life insurance?
If the premiums on funeral insurance and life insurance are compared, shows that life insurance is much cheaper. This is caused by the uncertainty about the timing of death. A term life insurance is for a certain period and has an end date, such as 65. If the death does not occur during the term of the policy, nothing is paid. The funeral insurance has no end date of the policy, and is therefore sure to benefit.
Funeral insurance is too expensive
In case you weren’t death at a young age, the funeral insurance is too expensive. It is more profitable to itself to build a capital that can be used to pay for the funeral. The problem is that at a young age is not enough capacity to build a funeral expense. This can be fixed by adding an initial life insurance in addition to run. The premium of this policy is low, and over the years can reduce the insured amount.
Insured amount is often too low
The funeral insurance would be once every five to ten years to be adapted to the increased cost of a funeral. The disadvantage of this is that the increase going to be calculated on the basis of the current age.
What makes expensive premium increases in later life?
There are two reasons for which both relate to the statistical life expectancy. The insurer assumes the statistics. A 55 year old has a greater chance of short-term mortality compared with a 35 year old. In addition, the insurers also note that the increased amount in a shorter period should be going up.
Terminate existing funeral insurance?
A funeral insurance that already runs you should not terminate for a longer period of time. At redemption you will receive only a small amount back and the premium is based on the age at the end of the insurance.