Life insurance -Way of providing a legacy – a plan under which regular payments are made to a company during somebody’s lifetime, and in return the company pays a specific sum to the person’s beneficiaries after the person’s death. Encarta Dictionary
Pre-Arrangement Insurance - Way of providing your loved ones with a plan for the disposition of your body upon death. In this case as in the life insurance plan you are providing a legacy, but one that is specific in its use, it is to be used for funeral expenses and final disposition of remains. Set-up with a local funeral home or cemetery with them as the assignee of the policy upon the death of the insured.
A life insurance policy and a prearrangement policy are very similar in nature as they are paid for in payments (premiums) or at once, depending on the affluence of the owner of the policy, but most policies are paid for at regular intervals, being monthly, annually or at some other pre-determined rate. However, a life insurance is for the beneficiary to use to continue with life and the prearrangement policy is used for the final expenses of the insured.
Pre-planning is a very sound and thoughtful decision to make for your loved ones. It not only makes your wishes known, but it also prepares you for the inevitable and relieves the burden from other members of your family at a time when they are most vulnerable and stressed.
