Life Insurance vs. Preneed Funeral Insurance: What’s the Difference?
Larry Moore • May 8, 2025
Life Insurance vs Preneed Funeral Insurance
When planning ahead or making arrangements after a loss, one of the most common questions we hear is:
What’s the difference between life insurance and preneed funeral insurance?
While both can help cover funeral costs, they work very differently—and knowing the difference can save your family from added stress during an already difficult time.
Life Insurance: Designed to Replace Income
Life insurance is primarily intended to provide financial support for your loved ones after you pass away. It’s often used for:
- Replacing lost income
- Paying off debts
- Covering long-term expenses like college or housing
Some families choose to use life insurance to pay for funeral services. While we do accept life insurance assignments at no extra charge (most funeral homes charge 3–4%), there are still a few important things to consider:
- The paperwork can be time-consuming. It often requires a death certificate, policy details, claim forms, and signatures from all beneficiaries.
- Most policies must be in effect for at least two years to pay out the full death benefit. This is known as the contestability period, and if the policy is newer than that, the claim can be delayed or denied.
- Outdated beneficiaries cause delays. We frequently see situations where the listed beneficiary has passed away, and the policy hasn’t been updated. In those cases, all next of kin must agree and sign off to use the funds for funeral expenses, which can be emotionally and legally complicated.
Preneed Funeral Insurance: A Simpler, Secure, Price Protected
Preneed funeral insurance is a policy created specifically to cover the cost of your funeral or cremation. You plan everything in advance with the funeral home, and the policy is tied directly to those arrangements.
Benefits include:
- Locks in today’s prices— your family won’t pay more even if prices rise
- Funds go directly to the funeral home— no guesswork or delays
- No beneficiary issues— the policy is assigned directly to us
- Flexible payment options— you can pay in a lump sum or over time (3, 5, or 10 years)
What If You Choose Monthly Payments?
If you choose to pay over time (multi-pay), coverage works one of two ways:
Immediate full coverage is available if you can answer basic health questions and qualify. This means your entire funeral is covered starting day one.
If you don't qualify for full immediate coverage, the policy is still active but pays:
- 70% of the funeral cost after one year, and
- 100% after two years
This flexibility allows nearly anyone to preplan their funeral, regardless of health or budget.
In Summary:
- Life Insurance = Supports your family financially; may be used for a funeral but not guaranteed or price-locked.
- Preneed Funeral Insurance = Covers your funeral only; planned in advance and protected from inflation.
Both are valuable tools—but they’re designed for different needs. If you want to make sure your family isn’t left with the burden of making funeral decisions or covering rising costs, preneed final expense insurance is a smart and thoughtful choice.
This year marks a milestone for Moore Funeral Home — 80 years of serving families in our community. As we reflect on our history, it’s impossible not to think of the people who shaped this place into what it is today. For me, that story begins with my dad, Larry Moore. In celebration of our 80th year, we placed a bronze plaque outside of our chapel naming it the Larry Moore Memorial Chapel in his honor and memory. This is more than a name — it’s a tribute to his vision, his hard work, and his deep commitment to the families of our community. In 2011, when a tornado destroyed our original chapel, Dad saw an opportunity not just to rebuild, but to build better. At a time when many funeral homes were downsizing to cut costs, he chose to do the opposite — creating a spacious, beautiful chapel designed to bring comfort and dignity to every service held here. He wanted families to have a special place to honor their loved ones, and he made sure they did. Dad also had a knack for noticing details that made a difference. At the old funeral home, built years earlier by his brother Ronnie Moore, he often joked (though he meant it) that the chapel was on the “wrong side” of the building. When services began, the family and casket had to be escorted through the lobby, past guests waiting there. He promised that if he ever rebuilt, things would be different. When the new chapel was constructed after the tornado, it was exactly the way he envisioned it — on the other end of the building, with a thoughtful layout that allowed families to enter the chapel privately and without distraction. The Larry Moore Memorial Chapel is a space built with love, foresight, and respect — qualities that defined my dad’s life and his work. We will dedicate the chapel during our One Moore Ride Cruise-In on Saturday, October 18, 2025. I hope you’ll join us as we celebrate Dad’s legacy, this special milestone in our history, and the community we are so proud to serve. For me, this chapel will always be a reminder of Dad’s belief that families deserve the best we can give them — and I’m honored to have his name on the place where so many lives are remembered.
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Why We Love What We Do at Moore Funeral Home
At Moore Funeral Home, we understand that saying goodbye is as deeply personal as it is profound. We find that families often find comfort and closure in seeing their loved one at peace, and we do everything we can to create a meaningful and healing experience. But there are moments—sacred, sobering moments—when our professional duty calls us to recommend a closed casket. This is never a suggestion we make lightly. We know this suggestion may feel abrupt or even painful. As funeral directors, we are not only stewards of the deceased but caretakers of the living. We carry both roles with reverence and responsibility. When a loss involves traumatic injury, illness, or circumstances that compromise the peaceful image we wish to preserve, a closed casket may be the most compassionate course. Our team grieves alongside you. We understand the instinct to want one final look, one last moment. But when the visual reality may cause shock, distress, or even lasting emotional harm, we must gently intervene. Our goal is not to deny closure, but to protect it—by helping families remember their loved ones as they were in life, rather than as they appeared in death. Our highest calling is not just to prepare a body, but to preserve the peace of those left behind.
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This morning, during my run before work, I started mentally listing the tasks ahead—vacuum the parlors, clean the bathrooms, print memorial folders, and more. But as I ran, my thoughts drifted beyond my daily checklist. I found myself reflecting on how much funeral services have evolved over the years. This year marks 80 years of Moore Funeral Home serving our community, and yesterday was a perfect example of how things have changed. In one service, the speaker—unable to travel from Texas—delivered his message via Zoom. At the same time, we conducted a large funeral at a church in Higdon which was live-streamed, allowing hundreds of people to participate from the comfort of their homes. I can’t help but wonder what my great-grandfather would think. When he founded Moore Funeral Home in 1945 , he likely never imagined technology playing such a role in how we honor and remember our loved ones. Yet, while funeral services continue to evolve, one thing has remained constant—our commitment to serving families with compassion, dignity, and respect. As we celebrate 80 years, I’m incredibly grateful for the past and excited for the future. Thank you for trusting us to walk alongside you during life’s most difficult moments. It is our honor to continue this tradition of care for generations to come.
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