Planning your final expenses

What Final Expenses Should I Plan For?

Most people know that financial planning is important for their future, but they may not always remember to plan for end-of-life costs. Common final expenses include outstanding bills, medical debt, and the actual cost of the funeral. If you don’t plan for these expenses, your loved ones could be left to pay all the bills. We’ll explain more about the final expenses you can expect and how to plan for them. 

Funeral Expenses

Funeral expenses can be surprisingly costly. It can be a bit morbid to think about, but financially planning for your funeral can help your family and friends avoid this unexpected, hefty cost. 

The exact cost of a funeral depends on many factors. These include whether you want to be buried or cremated, the casket, the funeral home, and whatever extras you would want at the event. Below is a breakdown of the common funeral costs. 

The funeral costs associated with burials can cost about $7,640 without a vault and over $9,000 with a vault. The National Funeral Directors Association cite these common fees:

  • Non Declinable basic services fee: $2,195
  • Removal/transfer of remains to funeral home: $350
  • Embalming: $750
  • Other preparation of the body: $255
  • Use of facilities for viewing: $425
  • Use of facilities for funeral ceremony: $500
  • Hearse: $340
  • Service car/van: $150
  • Printed materials: $175
  • Metal burial casket: $2,500

These costs depend on your location and materials. For example, a casket can cost $2,000-$5,000 on average or be as high as $10,000 — depending on the material. 

Expected Cremation Costs

If you’d like to be cremated, you can expect to pay slightly less. Even with cremation, you can get a casket and an urn. Without a cremation casket and urn, the total cost of a funeral with cremation is around $5,150. With the casket and urn, the cost is $6,645 on average. The breakdown of costs is below:

  • Non Declinable basic services fee: $2,195
  • Removal/transfer of remains to funeral home: $50
  • Embalming: $750
  • Other preparation of the body: $255
  • Use of facilities for viewing: $425
  • Use of facilities for funeral ceremony: $500
  • Hearse: $340
  • Service car/van: $150
  • Printed materials: $175
  • Cremation fee if using a third party: $350
  • Cremation casket: $1,200
  • Cremation urn: $295

There are also some unexpected costs associated with funerals. These include the cost of flowers, the obituary, the grave plot, the monument/marker, the church service donation, and the reception cost. The costs on average are:

  • Flowers: funeral flowers are $500-$700, burial wreaths $100-$200 each. 
  • Obituaries: $200-$500
  • Grave Plot: $1,000-$4,000 depending on area + opening and closing of grave for $1,000
  • Monument/Marker: Upright: $2,000-$5,000 for an upright marker, $1,000 if lying flat
  • Church Service Donation: $50-$200.
  • Reception: $400-700 with additional cost depending on the venue.

These funeral costs are only one piece that families are expected to pay after their loved ones pass. 

Outstanding Bills

Outstanding bills and debt are another major financial burden that loved ones may have to handle when someone passes. This debt can range from mortgages to private loans to credit card debt. There are many other miscellaneous costs that accumulate by the end of life.  

Hospital Bills

Another major debt that can accrue at the end of life is medical debt. Studies show that people spend a disproportionate amount of their healthcare costs at the end of their lives. It’s estimated that Americans spend $80,000 on medical expenses in the last year of life. These costs may include the hospital bills, but they can also include nursing home costs, rehabilitation costs, and many more hidden sources of medical debt. 

All of these debts can add up. Fortunately, there’s a way to financially prepare your loved ones for a future without you.  

Using Final Expense Insurance to Pay

Final Expense Insurance, also called burial insurance, is a type of life insurance policy that is meant to cover the costs associated with end-of-life. These policies are much smaller than typical life insurance policies, ranging between $2,000 to $50,000 in death benefit. Because the death benefit is smaller, the monthly premiums are generally much more affordable than regular life insurance. 

Final expense insurance works in much the same way as a regular life insurance policy. The policyholder purchases a policy, pays a monthly premium for the remainder of their life, and then their loved ones get the death benefit, or the policy amount, after the policyholder passes. The loved ones can then use this death benefit to cover any expenses they choose. While the original intention was for the policy to cover end-of-life expenses, theoretically the recipients can use the funds for whatever they choose. This flexibility is exactly why many people choose final expense insurance.  

Things to Consider About Final Expense Insurance

There are certain aspects of final expense insurance to be aware of before you purchase a plan. You should be aware of the cost and the timing of the death benefit.

Cost of the Policy

Final expense insurance policies are less expensive than regular life insurance plans. However, their exact cost depends on a number of variables. These variables include age, gender, smoking vs non-smoking, policy amount, and guaranteed acceptance. Typically, people who are expected to live longer will pay less per month because they are predicted to pay for more months overall. This means that younger people, women, and nonsmokers will generally pay less per month than older people, men, and smokers. 

The guaranteed acceptance plans are also more costly. Guaranteed acceptance means that regardless of your medical problems, the final expense insurance policy will accept you as a policyholder.

The Timing of Payment

One thing to warn your family members about is the timing of the death benefit. Even if you have a final expense or life insurance policy, your family members may still be expected to pay the costs upfront. It may take insurance companies as long as weeks or months to pay out the death claim.  

Senior Life Services Can Help

To help your loved ones prepare for their financial future, contact Senior Life Services. We’ll provide more information on final expense insurance.