Save or get life insurance?

Samac

A family member has recently passed on left his children money in the will. One family member has said she is saving 10k of it to help her children with any funeral related cost. I dont think thats in her best interest (nothing to do with me I know) but I think she would be better off using and spending that money and enjoying her life with it but taking out an insurance policy that pays out in the event of her death instead. As she is renting and no mortgage insurance needed she would only need a small life insurance payout to cover the cost so my thinking is If a small life insurance cost £40 a month she would get 20yrs of cover for the same 10k but be able to enjoy that 10k she was willing to save now, and in that time she will be left more monies from other family relatives, hope that makes sense? Any advice for me for her or am I wrong???

DullGreyGuy

You dont say how old this person is nor if they are working or retired. 

Those of working age tend to need to consider how they will pay for their home etc if they become too ill to work irrespective of if they rent or have a mortgage.

The obvious thing with funerals is that it is a question of when it happens not if it happens. So a 20 year policy is fine but what's the plan if she outlives that? You could look at Life Assurance/ Whole of Life instead to ensure there are monies there no matter when she dies but that will be more expensive. Another option, now they're regulated, is a funeral plan so they can decide exactly what they want now and not risk inflation meaning the settlement is too small.