Updated December 4, 2016 . AmFam Team
Having life insurance gives you peace of mind that you’re financially protecting the ones who matter most. It can help pay for debts like car loans and mortgage payments, and other living expenses your family might be responsible for if you were to pass away. But, that’s not all. Another substantial way life insurance helps your loved ones is by paying for final expenses, such as funeral costs.
Let’s see how having term life or whole life insurance helps your loved ones cover final expenses.
Final expenses are the costs associated with burial home fees, memorial services and cemetery charges — basically any of the costs associated with your death.
The best way to answer this question is by asking yourself if your loved ones could afford to pay for final expenses, if you were to pass away, out of pocket. Most funerals cost around $7,000 to $10,000, which can be a substantial hit to one’s bank account, especially if it’s unexpected. Funeral costs, placing the obituary in the newspaper, buying flowers, food for a commemoration meal after the memorial service, even medical bills — consider all of these final expense costs your family would be paying for. Apart from all the other great ways term and whole life insurance help your loved ones financially after your passing, they can use your life insurance to cover the immediate financial impact of final expenses.
If you plan on using some of your life insurance policy for final expenses, you’ll want to choose a trustworthy beneficiary who understand your desire to use a portion of the death benefit specifically for final expenses. Learn more about choosing a life insurance beneficiary.
You may also be able to choose a funeral home as your beneficiary for your final expenses. This option has a number of benefits, including maintaining the right to choose where your service will be held. Talk to your agent if you want to learn more about your options.
By taking the time to consider the costs of your final expenses, you’re proactively protecting your loved ones financial future. Talk with your American Family Insurance (Opens in a new tab) agent to plan ahead and ensure you have the right life insurance coverage to protect what matters most.