Can I use life insurance proceeds to pay for my loved ones funeral services?

Let me share with you from a practical experience how having a life insurance policy sometimes can not be used as a form of payment.

While I was a Memorial Counselor with a rather large cemetery in the Los Angeles area I served families who had a death. As part of our payment options, we were accepting life insurance policies as a form of payment.

However there were some requirements in order for this to happen.

1. We had to verify that the insurance policy was still in force or was it canceled for non-payment?
2. What was the actual amount of the policy?
3. Who is/are the current beneficiary/ies?
4. Is the insurance policy assignable?
5. Are there any loans or liens against the policy?

This usually takes anywhere from 24 to 72 hours to verify the information with the policy holder service of the insurance company.

Once the information from the insurance company is received then additionally this particular cemetery would do a background credit check. You say why would they do that if I’m going to use the insurance as a form of payment?

Well, the reason a background check is completed on you is because the cemetery is lending you their money, until the insurance company pays them for the services they rendered to you.

Additionally another reason if for some reason the insurance carrier doesn’t pay the cemetery for your services rendered they want to make sure you have the capability to repay them upon demand.

I personally saw many families who had insurance policies available to them but they did not have the credit worthiness behind them and were unable to use the proceeds coming from their policies.

It is for this reason that I strongly suggest that families pre-plan in advance. Normally it is a lot easier to put away monthly investments for a period of say five years than coming up with all the money necessary at once to bury your loved one.

What do you think about life insurance???

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ABOUT THE AUTHOR:
John Harris, is a licensed Cemetery Broker in the State of California. He has personally served over fifteen thousand families in preparing for cemetery and funeral services. He can be reached through his website: http://www.cemeterybroker.com

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This entry was posted on Thursday, December 29th, 2005 at 5:56 pm and is filed under Life Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.