What Are Your Options Of Pre-Need And Pre-Planning Programs?

Most people would rather think about living than dying. Hence, there is a lack of awareness about the need for pre-need and pre-planning programs. But when death strikes, those who haven’t prepared for this eventuality unwittingly create financial stress to those who are left behind. Aside from the grief that they are experiencing because of the loss of a loved one, the remaining family members are also burdened with shouldering the cost of the funeral service. Pre-need and pre-planning arrangements are therefore imperative nowadays, considering that the costs of funeral services are always in the habit of going up.

What Are Pre-Need And Pre-Planning Programs?
Basically, pre-need and pre-planning arrangements are financial tools that are designed to shoulder the cost of the funeral service and related expenses in the event of death. Some say that this is a person’s gift of love to those who will be left behind because they will be spared from the financial stress of searching for resources to finance the funeral service. Some of these programs work like life insurance plans where a person pays a set amount each month for a certain number of years for a particular pre-need program that costs a certain amount. In the event of untimely death, the contract is deemed fulfilled, even if the end of the contract period has not been reached. But if the person dies after the contract period, the cost of the funeral services will be shouldered by the company that issued the pre-need plan, but only up to the amount of the contract.

Why Is Pre-Planning Better?
Buying a pre-need plan is much better than paying for the cost of the funeral service once it is urgently needed. If a person chooses to have a pre-need arrangement, he will be able to control the funeral expenses. He can choose the type funeral arrangement he wants based on his capacity to pay. In their absence and in the event of death, the remaining family members are caught in the web of funeral expenses that are beyond their control. Since they urgently need the service, they are no longer in a position to choose and weigh their options. They will be forced to take whatever type of funeral arrangement is offered them and at whatever cost since they are already in dire need of the service.

Types Of Pre-Need and Pre-Planning Programs
There are several options available to those who would like to prepare for the eventuality of death. Here are some of the more popular ones in the market today.

1. Funeral Pre-Paying
With the funeral pre-paying program, you will be able to protect the cost of the funeral services even if the cost at the time of death has increased. Some institutions which offer this arrangement also guarantee a full refund if you move to another state or country making it very attractive. They also offer full transfer if you so choose.

2. Life Insurance
Life insurance is also a good option to pay for funeral expenses. It is basically a contract given by an insurance company to the policy holder in exchange for the premium he promises to pay every month. This policy also guarantees certain benefits during and after the agreed time period. If death occurs anytime during the paying period, the insurance company guarantees the lump sum payment of the amount of the insurance policy. This is known as the death benefit. It is paid to the beneficiaries of the policy holder. The most common name for this type of insurance is Term Insurance. Another option is the Whole Life insurance which offers certain benefit to the policy holder even if he outlives the period of his policy.

3. Pre-Need Trust Agreement
A Pre-Need Trust Agreement requires a person to give monthly payments to the company. The company invests the payments in a fund which earns interests and increases its value over time. This fund is usually invested in cemetery lots and properties. The investment is designed in such a way that the money increases its value in pace with inflation. A board of trustees in the company is charged with the monitoring of the investment. During the period of the contract, the funeral service and consequently, the cemetery lot is not available to the policy holder. They will only be available at the time of death.

4. Funeral Insurance
Funeral insurance guarantees the payment of the funeral costs. It comes in three types, Pre-Need Funeral Insurance, Final Expense Insurance and Burial Insurance. This pre-need arrangement can be used to pay the funeral expenses alone, or it can be used to pay for the final expenses such as legal costs, medical bills and so forth.

5. Payable On Death Account
A POD account can also provide access to bank accounts in the event of death of the account holder. This is offered by commercial banks, savings and loan institutions and credit unions.