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If the unthinkable happened and you died today, do you have peace of mind knowing your family could pay your funeral expenses? Or would they have to scramble to find a way to pay for your funeral and burial, relying on savings, help from other family members, or credit cards to give you the send-off you deserve?
Many people don’t think about their final arrangements until they are in their twilight years, only then realizing that their families may not have the financial resources for a cremation or funeral. However, if you invest in final expense insurance, you can give them the tranquil assurance that comes from knowing they won’t have to cut corners or make hard choices when it comes to the end of your life.
Ask yourself this: Can my family carry on financially if I die suddenly?
If the answer is “no,” you aren’t alone.
Research from the Consumer Financial Protection Bureau shows that the average income drop for surviving spouses is 11%, and widows over age 60 are more likely to face poverty.
Further research from the industry group LIMRA shows that over 40% of households would face financial hardship within six months with the loss of a wage earner.
A life insurance policy provides reassuring tranquility and peace of mind that your family will have the money they need to eliminate debts, pay the mortgage, or cover other expenses while they get back on their feet after your passing. But depending on the death benefit amount of that policy, there may not be enough to pay your final expenses and everything else.
According to the National Funeral Directors Association, in 2024, the average cost for a funeral and burial will be about $8,000; a cremation and funeral will be about $7,000. If you have a high-value life insurance policy or substantial assets at your death, paying this bill may not be a problem. If you don’t, the funeral cost could be one more stressor for your family during an already trying time.
A funeral insurance policy (a.k.a. final expense or burial insurance) is a type of life insurance policy for the express purpose of covering the cost of your final arrangements. Compared to other life insurance, such policies have lower death benefits — the maximum amount is $50,000, with most people purchasing about $10,000 worth of coverage — but they are easier to get and pay faster when the insured dies. Some people buy funeral insurance and life insurance to offer mindful reassurance to their loved ones that their final arrangements are in place and won’t cause financial hardship.
If you have a term life insurance policy, your family will receive a payout when you die. However, if you die after the term expires, and you didn’t upgrade to a permanent (whole life) policy or buy a new one, they’ll be left empty-handed.
Therefore, even if you already have a term life insurance policy, it’s worth investing in a permanent final expense policy for extra peace of mind.
When you want to provide your family with serenity and confidence when you pass, you have two primary options for final expense insurance.
A standard insurance policy is essentially a life insurance policy you buy directly from the insurance company for your funeral expenses. When you die, the insurer will pay your designated beneficiary a death benefit in the policy amount. This cash can pay for all your final expenses, and your beneficiary can use any remaining funds to pay off your debts.
Although you can purchase a final expense policy regardless of health concerns, your family may not get the total policy amount if you fall within a specific age range (usually 45 to 80). Most funeral insurance has a graded benefit, which requires you to hold the policy and pay premiums for a minimum number of years before it will pay the full death benefits. For example, if you die within the first year after buying the insurance, your family may only receive 25% of the benefit.
One way to avoid this and give your family greater peace of mind is to purchase a guaranteed payout policy. These policies will pay your beneficiary the higher of the policy amount or paid premiums. This type of policy may cost more than other options, but it comes with the calmness guarantee of an adequate payout.
Another option for giving your loved ones assured peacefulness is with a pre-need burial insurance policy.
Like everything else, funeral costs are on the rise. There’s no way to know when you will die, but there’s a good chance it will cost more to lay you to rest in the future than it does today. A pre-need insurance policy is a good way to “future-proof” your final arrangements.
Most people purchase a pre-need insurance policy through a funeral home to pay for their expenses at the current prices. You select the services you want and buy a policy to cover the cost with the funeral home as the beneficiary. When you die, the funeral home claims the policy and receives the payment.
While a pre-need policy can save money on funeral costs, especially if you are young and in relatively good health, and it could be decades before you need the policy, there is one significant drawback: Your family does not get any cash. The funeral home keeps the entire payout, even if the amount exceeds the cost of your funeral, so there won’t be any extra funds to cover additional expenses.
Giving your family peace of mind means eliminating some of the uncertainty of losing a loved one. When you make big decisions before you die and put safeguards in place to protect them financially, you give them the gift of assured peacefulness and the ability to focus on other priorities during a difficult time.
Making final arrangements involves more than telling your family that you prefer cremation over burial. You must also consider the costs of things like:
The costs can add up quickly, but the funds from funeral insurance ensure your family doesn’t have to worry about them.
When you purchase a final expense policy, the amount of coverage depends on your final wishes. For example, a direct cremation, which doesn’t include a viewing or funeral, costs significantly less than a burial with a funeral. Visit a funeral home or research how much your arrangements will cost to decide how much insurance to buy.
A few things to know about buying this kind of insurance:
One of the most critical elements of purchasing funeral insurance is communicating with your family about the policy. Inform them that you have a policy, where they can access the policy documents, and how to make a claim. Providing this information gives them even more peace of mind that everything is in order when you pass.
If you’re among the nearly half of Americans who don’t carry life insurance or don’t have enough coverage, it’s time to look into funeral insurance. With one of these policies, your loved ones won’t have to worry about paying your burial or cremation costs on top of your other debts.
Get help finding the right funeral insurance for your needs from Insurdinary. Use our easy online quote form and receive instant quotes to compare side by side. When you’re ready to buy, a licensed Insurdinary agent will help you apply and answer all your questions.
If you have questions about life insurance, talk to Insurdinary to see how the right policies can secure your family’s financial future and offer greater peace of mind.