What’s the Difference Between Preneed Life Insurance and Traditional Life Insurance?

Life insurance of any kind is based on a common premise – PROTECTION. We use life insurance to protect the ones we love from costs associated with end of life needs, the burden of unpaid debt after we pass away, and even threats to continuity of lifestyle.  So what’s the difference between a preneed life insurance trust and traditional life insurance?

PRENEED LIFE INSURANCE TRADITIONAL LIFE INSURANCE
Lower monthly premiums No Yes
Guaranteed issue Yes Yes
(some types)
Short-term payment plans Yes No
Protected from Medicaid spend down Yes No
Less total out of pocket expense Yes No
Guaranteed funds are there to cover funeral expenses Yes No
Funds paid directly to funeral home within 48 hours Yes No
(requires presentation of death certificate)
Meaningful memorialization Yes No

Preneed Life Insurance

  • Lower monthly premiums

  • Guaranteed issue

  • Short-term payment plans

  • Protected from Medicaid spend down
  • Less total out of pocket expense
  • Guaranteed funds are there to cover funeral expenses

  • Funds paid directly to funeral home within 48 hours

  • Meaningful memorialization

Traditional Life Insurance

  • Lower monthly premiums

  • Guaranteed issue (sometimes)

  • Short-term payment plans

  • Protected from Medicaid spend down
  • Less total out of pocket expense
  • Guaranteed funds are there to cover funeral expenses

  • Funds paid directly to funeral home within 48 hours (requires presentation of death certificate)

  • Meaningful memorialization

Have more questions?

If you have more questions about The Catholic Funeral Plan®, contact us and we will be happy to assist you.