Most people don’t plan on dying. Their families are often left with the excruciating situation of having to deal with the loss of a close loved one coupled with the financial distress of having to pay for a loving funeral. Funeralwise estimates that the average funeral today costs $12,000*. In its report “The Rising Cost of Dying, 1986-2017,”* the Bureau of Labor Statistics notes that in this 30-year time period, the price of funerals has approximately doubled the cost of inflation. For many families, paying for a nice funeral is out of reach, but many surviving family members go into debt for this expense because they are consumed by grief. Caring individuals who do not want to put themselves through this ordeal often consider compassionate alternatives, such as paying for “final expense” insurance. Fortunately, National Family Insurance fills in these gaps and allows you to compare the prices of comparable insurance products to find the best deal.
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What Is Final Expense Insurance?
Final expense insurance covers the expenses to bury or cremate you after you die. It is commonly used to pay expenses, such as:
- Medical expenses for your final illness
- Funeral expenses
- Cremation expenses
- Burial expenses
- Viewing or wake expenses
This type of insurance is not intended to cover costs to replace your income or surviving family members. Instead, it is used to cover those expenses directly linked to your death so that your loved ones do not have to carry this financial burden during their time of grief.
Why Should I Buy Final Expense Insurance?
Most people can’t self-insure for their final expenses, meaning that your family may not be financially equipped to shell out more than $10,000 for an expense they didn’t see coming. And the paltry $255 Social Security death benefit* – that won’t even pay for the flowers. Even worse, projections are that the average funeral cost may rise soon to a whopping $17,000*.
Term insurance is a viable alternative for some people, but many people outlive the term that they initially set. They might not need as much insurance once their children are no longer minors. Also, other forms of life insurance may take months before they are actually given to the beneficiary.
Unfortunately, when families do not have the necessary funds to pay for a funeral, a common outcome is for them to go into debt*. Funeral homes will generally require all payments upfront. Even though it might not make financial sense, grieving family members may ignore the costs to honor their loved one in the way they feel they deserve. Unfortunately, many funeral homes are aware of this and prey on grieving families. Statistics show that about one quarter* of funeral homes do not comply with a federal rule that was designed to protect consumers during their time of grief and to reduce the likelihood of funeral homes taking advantage of the situation by making unnecessary or expensive purchases, according to an audit completed by the Federal Trade Commission.
On the other end of the spectrum, some families refuse to claim the body of a loved one so that the state will have to pay for it. This may lead to many bodies being unclaimed and mass, unnamed burials being conducted. During times of economic uncertainty, the number of unclaimed bodies increases*.
Additionally, final expense insurance allows you to cover just those expenses that are necessary to ease the financial burden, so it is not costly. Also, it gives your loved ones some flexibility by not depositing the funds directly into a particular burial site or funeral home.
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How Do I Calculate How Much Final Expense Insurance I Will Need?
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For the most part, figuring out how much final expense insurance you need is a simple math problem where you add up the various costs of items you expect to purchase, such as:
- A casket – If you are having a traditional funeral, you will probably want to purchase a casket. The Federal Trade Commission estimates the average cost of a casket at $2,000, but mentions that more expensive caskets made of mahogany, bronze or copper can cost upwards of $10,000.
- Funeral fees – These are the standard fees that are common to all funerals, including funeral planning, the costs for necessary permits and death certificate copies, funeral notices and administrative fees to coordinate the plans.
- Cremation – If you will not be buried, you will still have the expense of the crematory and urn. Additionally, you may still want a memorial. Funeralwise estimates that the average cost of cremation with a memorial service is $8,000 to $10,000.
- Service cost – If your loved ones will be having a memorial in your honor, they may pay . This fee may not include charges for optional items, such as flowers or decorations.
- Burial plot – For a burial plot, Funeralwise estimates between $1,000 to $4,500 for a basic plot or $5,000 or more for a burial vault.
- Headstone – A headstone is not typically included in the average cost of a funeral, so this will be an extra charge. A good rule of thumb is about $1,000 to $3,000 for a standard headstone.
- Other expenses – You may have specific other expenses, such as the cost of a trip to scatter your ashes, paying travel expenses for out-of-town guests, or catering a meal for your loved ones. Also, you might have other expenses* to consider, such as the cost of a hearse, body preservation or memorial printed package.
Also, you might want to add in an extra buffer for medical expenses or other short-term bills.
How Much Does Final Expense Insurance Cost?
Like all insurance policies, there is wide variation regarding the cost of insurance. The cost of your final expense insurance will depend on several factors, such as your:
- marital status
You want to lock down an insured rate ahead of time. Often, the younger you are when you purchase the policy, the less it costs, which saves your family more money in the long run. You should expect to find final expense insurance at less than $100/month. Many people can purchase it for a few dollars a month, based on coverage amounts of $5,000 to $25,000 a month. For help, you can use National Family Insurance’s system to compare different coverage options.
Don’t leave your loved ones in a lurch by failing to plan. Instead, use National Family Insurance system to get rates from available companies and avoid the hassle of contacting endless insurance representatives who will try to sweet talk you into purchasing more insurance than you really need.
*https://www.funeralwise.com/plan/costs/ https://www.bls.gov/opub/ted/2017/the-rising-cost-of-dying-1986-2017.html *https://www.ssa.gov/planners/survivors/ifyou.html https://eebrokers.com/wp-content/uploads/2015/02/Projected-Funeral-Cost.pdf *https://www.blackenterprise.com/when-a-relative-dies-and-you-cant-afford-the-funeral-2/ *https://www.marketwatch.com/story/dont-get-cheated-at-the-funeral-home-2014-03-21