If no prior arrangements are made the cost of your funeral at your passing falls to your family. According to NJ State Funeral Directors Association (NJSFDA) A typical funeral that includes a 1-day visitation, embalming, committal and church services, local transfer, transportation, casket and other burial cost is an average cost of $17,128. Do not forget whether you may want a catered meal after the service. Or perhaps a trip abroad to scatter your loved one’s ashes. Additionally, it is probably best not to count on the lump sum death benefit from Social Security to pick up the slack, that is only $255. This all can cause an undeniable strain on the finances of your family already saddened with your loss
A final expense life insurance policy isn’t the same as what’s known as “insuring your life.” Insuring your life concerns leaving your family and loved ones with enough support after you pass away. Term and permanent life insurance value your policy as proportionate to your earning power now and for the rest of your expected life span. With funeral insurance, the value of your policy is proportionate to the expense of your desired funeral. While other forms of life insurance can top a million dollars, it is rare for final expense insurance policies to get above $20,000.
The exact cost of your final expense insurance will depend on your age. Unfortunately, the older you are, the larger the premiums. This is because insurance companies take on more risk when insuring older folks, given the fact that they’re statistically closer to death. If you buy final expense insurance when you are 45, you’ll pay less each month than if you wait to purchase until you’re 75.
If you want to leave a clear indication of your wishes without necessarily locking in the funeral home, you could always combine burial insurance with a document stating your preferences. Kept wherever you keep your will (you have a will, right?), this document would cover issues like burial vs. cremation, open vs. closed casket. etc.
Whether you choose a life insurance policy that covers funeral expenses and then some, a dedicated final expense insurance policy, or funeral pre-payment, you’ll be doing your loved ones a huge favor. Taking the time to consider and document your end-of-life wishes may be a little uncomfortable now, but it will make all the difference when the time comes.
If you are having a hard time figuring it out on your own, consider turning to BEW Financial Solutions. As we review your concerns and needs, we are able to help you with all your retirement and estate planning.