What is funeral insurance?
Funeral insurance is insurance to cover the cost of the funeral when you die and is included in the small amount of short-term insurance (mini insurance).
What is “small amount short-term insurance”?
Insurance with a small amount of insurance and an insurance period of 1 year (2 years depending on the field) within a certain business scale of the insurance industry.
Funeral insurance is cheaper and often does not require a doctor’s consultation when enrolling, and is characterized by looser enrollment requirements than general insurance products.
In addition, general insurance products have an upper limit on the age at which they can be enrolled (65 to 75 years old), but funeral insurance products are also available for up to 89 years old.
There are two types of insurance to cover funeral expenses, life insurance (whole life insurance) in addition to funeral insurance. So it is necessary to consider which one to take out after clarifying the purpose of taking out insurance. There is.
Market price for funeral expenses
According to the “11th Funeral Questionnaire Survey Report (conducted from August to September 2016)” conducted by the Japan Consumers Association, the market price for general funeral expenses is 1.95 million yen.
In addition to the cost of performing the funeral, the following costs are required for the funeral.
Examples of funeral costs
- Overnight behavior and devotion Offering to monks and temples.
In addition to the above, it also costs to organize leftover items and set up a grave. So in some cases a total cost of 3 million yen or more is required.
It is economically burdensome to cover these costs from savings. But if you have insurance in advance. You can cover the cost of the funeral.
How to prepare for a funeral and its advantages and disadvantages
There are two main ways to cover the cost of a funeral.
How to prepare for a funeral
- Funeral insurance (small amount of short-term insurance). Recommended for elderly people who only want to prepare for funeral expenses
- Life Insurance (whole life insurance). Recommended for young people who want to have life insurance.
Let’s check the advantages and disadvantages of each insurance.
Funeral insurance (small amount of short-term insurance)
The advantages and disadvantages of taking out funeral insurance (a small amount of short-term insurance) as a way to prepare for a funeral are as follows.
- Monthly premiums are cheaper than general insurance products
- The warranty period is one year and it is easy to review the contract details
- Even people with illnesses can join because there is no need for a doctor’s examination to join.
- There are insurance products that even elderly people over 80 can take out
Disadvantages of taking out funeral insurance (small amount of short-term insurance)
- Since it is a throw-away type of insurance, there is no cancellation refund, etc.
- Due to the upper limit of the insurance amount.
The advantage of funeral insurance (a small amount of short-term insurance) is that monthly premiums are cheaper than general insurance products.
In addition, it often does not require a doctor’s examination. Which has the advantage that even people with chronic illnesses and the elderly can join.
On the other hand, funeral insurance is a throw-away type of insurance, so the disadvantage. Is it that the premiums paid up to that point will not be returned in the case of cancel cancelation? If you join for a long period of time. You may lose your principal.
Because of these advantages and disadvantages, insurance is suitable for “elderly people who only want to prepare for their own funeral expenses.”
Life insurance (whole life insurance)
The advantages and disadvantages of taking out life insurance (whole life insurance) as a way to prepare for a funeral are as follows.
- There is a sense of security that the guarantee will last a lifetime.
- At the time of cancellation. You can receive a large amount of money as a cancellation refund.
Disadvantages of taking out life insurance (whole life insurance).
Strict enrollment requirements such as doctor’s examination and notification obligation.
There is an upper limit on the age at which you can join (65 to 75 years old).
The biggest merit of a Life Insurance Policy (whole life insurance). Is that there is a sense of security that the insurance will last a lifetime.
Even if you cancel the contract. You can receive the cancellation refund according to the time. You can rest assured even if you need to pay a mortgage, raise a child, or care for your own parents.
If you have passed the premium payment period. You may receive a surrender value that exceeds the premium you paid. So whole life insurance is suitable for people who want to prepare for various situations in their lives as well as funeral expenses.
However, in some cases, you may not be able to take out life insurance because the monthly.
There is an upper limit to the age at which you can join.