The heartache of a loved one’s loss can be incredibly painful, frightening, and life-changing. During those initial days, it can be difficult to face daily tasks or take care of necessary arrangements for a lost loved one. Yet there’s much to do in the days following a death, along with significant costs to cover.
As you get older, planning ahead for the end of life can help make this challenging time a little easier for your family. Having burial expense insurance can ease financial burdens, from funeral costs to medical bills, and allow your family to focus on the grieving process.
Burial insurance, also known as final expense insurance or funeral insurance, is a type of life insurance generally available to people 50 and older. Unlike term life policies, which last for a set period of time, burial insurance is a type of permanent insurance. That means it offers a guaranteed payout your family can count on to cover end-of-life costs. Coverage amounts typically range from around $5,000 to $35,000, and approval is quick and simple.
Though the name of this policy suggests it covers the cost of a burial, the payout from a burial insurance plan can cover a wide range of financial needs. Wondering how a policy could support your family? Here are a few ways burial expense life insurance can provide financial support beyond paying for your funeral.
#1: Medical bills
Medical debt is a rapidly growing problem in the U.S. According to a 2019 study, 137 million Americans experienced financial hardship in the past year due to medical bills. A significant amount of that debt comes at the end of life, especially with inpatient stays, long-term care costs, and numerous doctors’ appointments.
Burial expense life insurance can help cover some or all these costs. If you have a long illness or need residential care in your final months, the beneficiary of your policy can use the funds from your final expense insurance to pay those bills after you pass away. That can help to alleviate some of the financial hardships your loved ones face.
#2: Day-to-day expenses
Once a person passes away, their loved ones must go on. But meeting financial needs after a loss can be a challenge, especially if your family was relying on your income. Your children or spouse may also find it hard to go back to work right away, especially if you die unexpectedly.
Life insurance for burial expenses can provide a financial cushion, allowing your family to cover daily expenses or to take their time getting back to work. Your beneficiaries can use the funds for whatever they see fit, including mortgage or rent payments, utility bills, taxes, groceries, and other essentials.
#3: Outstanding debts
Americans have more debt than ever before, with U.S. adults owing more than $90,000 in debt on average, according to an Experian study. Many people die with at least some debt. If you’re counting on your estate to cover those costs, keep in mind that your family may need to sell the family home or use financial resources intended to help support your spouse after your death. Estates can also take months to settle, while fees and interest continue to grow on your debt. Burial insurance plans offer a payout your family can use to help cover these costs – without lengthy waiting periods.
#4: Cremation and other final expenses
One of the main reasons people buy final expense insurance is to cover the cost of a funeral, which can average $10,000 or more. Beyond the basics of a service and burial, think about related expenses that may come up during your final sendoff. If you’re considering cremation, for example, the cost for crematory services alone can run from $1,100 to $10,000 or more. Even if you pre-pay for many of the funeral costs, unexpected expenses can add up. Final expense insurance can provide funds to help your family pay for any extra costs, like airfare for out-of-town relatives, a post-service gathering, or even a trip to scatter your ashes.
#5: Gifting a charity or loved one
Final expense insurance can be an affordable way to leave a legacy that lasts beyond your lifetime. For example, you can gift a policy to a child or grandchild who you know needs financial support. You may also wish to leave the funds behind for a religious organization or charity that’s important to you. It’s also possible to split a funeral insurance policy among multiple beneficiaries, using a portion of the payout to cover funeral costs and gifting the rest.
Have more questions about burial insurance?
Burial insurance can be an affordable way to provide for your loved ones when it matters. If you have questions or need help finding the right policy, Fidelity Life is here to help. Learn more about burial insurance or get in touch with us to talk to an agent today.
At Fidelity Life, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.