Preparing for Your Final Expenses: A Guide to the Basics
Editor’s note: This post was originally published on 9/14/17 and has been updated for accuracy and comprehension.
It’s no one’s favorite topic.
Talking about death, especially your own, can be uncomfortable and downright anxiety-inducing.
But, if you’ve ever had to make funeral arrangements for a loved one, you know the significant cost involved.
You’re also aware of the numerous decisions that need to be made.
Preparing for your own final expenses may not be easy, but it will make all that follows much less burdensome for those you leave behind.
If you’ve never considered final expense insurance or don’t even know what it is, you’ve come to the right place.
What is it?
Also known as burial insurance, the purpose of this insurance is to cover the costs that your family will face after your death.
The funeral expenses alone can average around $10,000,
Of course, this number is in addition to any medical bills you may have accrued.
Final expense life insurance is different from other kinds of life insurance.
One difference is that the costs for regular life insurance are determined by the amount of money you earn now, as well as your potential for the rest of your life.
The cost for final expense insurance is calculated according to the kind of funeral you wish to have.
Other forms of life insurance can be for as much as a million dollars, burial insurance is rarely for more than $20,000.
Do you need it?
The $10,000 quoted earlier as the average cost of a funeral only includes services performed by the funeral home, such as embalming, the casket and vault, the hearse and other transportation fees.
It doesn’t include a cemetery plot, the fees for opening and closing the grave or the headstone and its installation.
There are other factors to consider, too.
Will your family want to hold a catered reception after the services?
Are there any special memorial items that your family may want to have printed to distribute to those who come to pay their respects?
Unfortunately, there are always unexpected costs that add up quickly.
The answer to the question, “Do you need it?” is that it depends.
Will your family have the resources to pay for these costs out-of-pocket?
If not, or if you don’t want them to have that financial burden, you should look into burial insurance.
What about the cost?
The bottom line on the cost is that the older you are, the more final expense insurance will cost you.
The reason is sobering but makes sense.
Your statistical chances of death rise as you age.
For example, you’ll pay much less for your policy when you purchase at 45 than if you wait until you’re 75.
The problem with prepaying
You may be wondering why you can’t just prepay for your funeral now, while you’re still alive and kicking.
You certainly have that option and there are some pluses to that approach.
You can take the time to find a funeral director with whom you feel comfortable.
You’re able to pick things out for yourself, like the casket you want and the cemetery plot with the most beautiful view.
But, there are some problems that can come up.
Things change. You can face an unforeseen move, the funeral home you chose so carefully could go out of business or you could just change your mind about the choices that you made.
Not to mention the scammers out there who prey on the vulnerable.
Any of these options can end up with you losing your money!
With final expense insurance, your family will receive a payout that allows them the flexibility they need to carry out your wishes.
A necessary conversation
It’s no fun to talk about preparing for your eventual passing, but your family will be grateful.
Have the hard conversation with your spouse and/or other family members about the need for burial insurance.
When everyone understands the high costs associated with death, it makes the decision much easier.
The difference an insurance expert makes
Planning for your final expenses isn’t the happiest of topics, but working with an independent insurance professional who knows the ins and outs of this type of insurance can make the process much less painful.
Here are some of the reasons you should talk to an expert.
- They provide one-stop shopping. Chances are, you can purchase final expense insurance right along with your auto/life/homeowners policies.
- It’s complicated. Coverages vary from provider to provider, so you need to work with someone who’s familiar with each company and can choose the one that’s the best fit for you.
- They have your back. An independent insurance agent won’t just help you find a policy and walk away. They’ll be there to answer your questions and guide you through the process with compassion when the time comes to activate the policy.
That’s what you can expect from any of the professionals you’ll work with at InsureOne Benefits.
Give us a call today!
We’d love to talk to you about your options for dealing with your final expenses.
How prepared are you for the expenses your family will face when you pass away?