Final Expense FAQ

What Is Final Expense Life Insurance & How Does It Work?

Final expense insurance is a whole life insurance policy designed to pay for your funeral costs.

It often goes by the alternate names of end-of-life, burial, or funeral insurance.

It’s a great way to secure peace of mind knowing that your death won’t result in a financial burden for your family.

Upon your death, the insurance company will quickly pay out a tax-free cash benefit to your beneficiary(s).

They can use the money for anything (not just funeral expenses), including medical bills or financial debts.

These plans are typically available to seniors 50-85. However, some providers issue coverage to young adults as low as 18 and as old as 90 (very rare).

Because these plans are designed to cover your final expenses, the amount of coverage you can purchase is much smaller than traditional life insurance policies.

Typically, the coverage options are $50,000 and below.

How Does Final Expense Insurance For Seniors Work?

Final expense insurance requirements are very lax. They don’t require a medical exam, and most companies’ underwriting is pretty lenient.

In other words, seniors with prior health conditions can still qualify for a new policy.

The majority of final expense companies only require applicants to answer some basic health questions.

Plans with health questions, if approved, have no waiting period. Upon making your first payment, you’ll be insured for the full death benefit.

At the same time, some policies have no health questions. Those are called guaranteed acceptance life insurance plans.

With those, you cannot be denied due to health, but there is a two-year waiting period. If you die of natural causes during the waiting period, the insurance company will only refund your money plus a tiny amount of interest.

Tip:

Unlike a term life insurance policy, final expense insurance is a type of whole life insurance, so it will never change. It’s permanent life insurance that will never expire at any age. Additionally, the premiums and coverage will remain the same, and it will build cash value that you may borrow from any time you’d like.

In the application process, you designate the coverage amount you want to be insured for and who the beneficiaries are.

Most policyholders prefer to make their premium payments monthly. But if you want to pay quarterly, semi-annually, or annually, most insurance companies will allow that.

After you die, your beneficiary(s) need to notify the company to start the claims process. Usually, a life insurance company will have them provide a copy of the death certificate and sign claim forms.

Once the company approves a claim, they typically pay out the respective death benefit within 24-48 hours.

What Does End-Of-Life Insurance Cover?

Final expense insurance for seniors will pay out a cash benefit to your loved ones (or funeral home), so they don’t have to come out of pocket for your end-of-life expenses.

There are no restrictions on how they can spend the payout money, which means they can use the proceeds for non-funeral costs, including:

• Burial costs (including vault, casket & viewing)

• Cremation costs

• Credit card debts

• Medical bills

• Legal bills

• Cemetery fees

• Embalming

• Flowers

• Opening and closing of the grave

• Headstone

Your family members get to keep any unused funds.

How Much Does Final Expense Life Insurance Cost?

The average cost of a final expense policy for $10,000-$15,000 in coverage is roughly $50-$100 monthly, depending on your exact age, gender, state of residence, health, tobacco usage (if any), and how much coverage you purchase.

By far, your age most heavily impacts life insurance rates.

For example, final expense life insurance for seniors over 70 will be double the cost of someone in their 50s.

And final expense over 80 costs nearly double what someone in their 70s would pay.

Also, if you have severe health issues, that might result in higher monthly premiums.

For example, someone with COPD will surely pay a higher premium than someone without COPD.

Types Of Final Expense Policies

There are two kinds of final expense insurance that you can buy.

Each type has a different cost structure and pros and cons.

Simplified issue

This type of policy is commonly known as no exam final expense insurance because you don’t have to complete a medical examination. However, you will have to answer health questions.

Your eligibility is based on how you answer the questions and your prescription history. When you apply, the insurance company will electronically analyze your medication history (with your permission).

Knowing which medications you have been previously prescribed tells them a great deal about your health. Generally, simplified issue life insurance coverage only takes about 10-15 minutes to determine if you’re approved or declined.

Simplified issue plans can have no waiting period where you’re fully insured for natural causes or accidental death once you make your first premium payment.

Guaranteed acceptance

This type of life insurance does not require answering health questions or completing a medical exam. You cannot be denied due to your health history.

These plans always include a 2-3 year waiting period. Any non-accidental death during the waiting period will only result in a refund of your premiums.

In addition, guaranteed issue life insurance plans are more expensive than plans with health questions. The insurer takes on serious risk by not knowing about the applicants’ health.

With higher risk, insurance will always cost more.

How To Qualify For A Final Expense Insurance Policy With No Waiting Period

Final expense insurance with no waiting period means you’re immediately insured for natural and accidental causes of death right away.

Even if you pass away on the day the policy starts (the effective date), the insurance company still has to pay the full death benefit.

Fortunately, final expense policies were built so seniors with health conditions can still qualify for immediate coverage.

Understand that some high-risk health issues, such as having a terminal illness, would make a waiting period inevitable.

It’s important to understand that you must qualify for insurance products with no waiting period.

To do so, you must apply with a company that requires you to answer health questions (no exam necessary).

Tip: Guaranteed acceptance coverage with no waiting period does not exist with any company. There will always be a two-year waiting period if there are no health questions.

For example, Mutual of Omaha’s Living Promise coverage has no waiting period, but you must answer their health questions to qualify.

It’s also worth noting that almost all immediate coverage options are only sold through licensed insurance agents.

If you want to buy final expense insurance online with no waiting period, you’ll need to buy through an agency.

Companies like Colonial Penn that allow you to apply online fully or through the mail have a waiting period. Not always, but most of the time.

Pros And Cons Of Final Expense Insurance

The Good

• Very fast approvals

• No medical exams required

• Lifelong coverage

• Fixed prices

• Applicants as old as 90 can still qualify

• Tax-free cash payment your family can use any way they desire

• Fast claims processing

The Bad

• Low face value maximums (usually less than $50K)

• Many providers (not all of them) include a 2-3 year waiting period

• More expensive than other forms of life insurance

• Doesn’t lock in funeral costs at today’s rates

• The death benefit may not be enough to cover your preferred funeral

• It’s possible after many years for the premiums to exceed the death benefit

Do You Need A Final Expense Program?

If you currently have no means to pay for your funeral costs, final expense insurance is the perfect solution to ensure your family isn’t stuck with the burden of unpaid funeral bills.

The National Funeral Directors Association (NFDA) reports that the average cost of a funeral is $9,420 (burial including a vault & viewing).

Most American families cannot stomach a $10,000 unexpected bill.

Tip:

Social Security only pays $255 to eligible survivors for burial costs

That is why final expense life insurance is the ideal way to ensure your passing won’t result in a financial burden.

If you currently have enough cash, investments, or other means to pay for your funeral costs, then a final expense policy isn’t necessary.

Sadly, most seniors are not in that situation, and a policy is the only way they can cover their end-of-life expenses.

Final Expense Insurance Vs Life Insurance

It’s common for some seniors to proclaim that they only want final expense burial insurance and don’t want life insurance.

Final expense insurance is life insurance.

A funeral only happens when someone dies, which is why final expense coverage is a type of life insurance.

Is Burial Insurance Worth It? | The Pros & Cons

If your death would result in a financial burden for your family, a final expense insurance policy is the optimal way to ensure your family doesn’t go into debt paying for your funeral costs. That said, consider all the pros and cons of burial insurance to determine when and if it’s worth buying this type of coverage.

KEY TAKEAWAYS

• A burial insurance plan can provide immediate peace of mind, knowing that you’re covered upon the first premium payment and that the policy will pay for your funeral costs.

• Those with sufficient cash to pre-pay for their funeral don’t need a final expense policy.

• Final expense policies offer fixed rates and lifetime coverage. Applicants with pre-existing conditions are still eligible, and approved claims are usually paid out within 24-48 hours. However, some plans have a two-year waiting period, and many companies falsely advertise prices that aren’t remotely accurate.

Is Burial Insurance Worth Buying?

Burial insurance is a very worthwhile purchase for people who don’t have cash, investments, real estate, retirement funds, or other financial means to pay for funeral costs. These policies cover all your funeral costs, medical bills, credit card debts, or other final fees, so your family doesn’t have to go into debt paying these expenses.

Tip:

Final expense insurance is also frequently referred to as “burial insurance,” “end of life insurance,” “ funeral insurance,” or “cremation insurance.” These labels (regardless of who uses them) are all synonyms.

However, only some people need or would benefit from a final expense insurance policy.

If you have the funds to buy a pre-paid funeral or cash that you can set aside specifically for funeral expenses, you don’t necessarily need a final expense policy. You can purchase one as a personal preference, but you don’t necessarily need it.

Pros & Cons Of Final Expense Insurance

The Good

• Affordable premiums: Final expense life insurance is generally very affordable. The typical cost is $50-$100 monthly for $10,000 in coverage. It’s worth mentioning that your price will depend on your age, gender, state of residence, health, and how much coverage you buy.

• Rates that never increase: Burial insurance is a type of whole life insurance that has a fixed monthly premium.

• Lifetime coverage: Since a final expense policy is a type of permanent life insurance, it has no age limit and thus will never terminate due to age.

• No exam: Final expense policies are “simplified issue,” meaning no medical exam is required. Some policies don’t even require you to answer health questions.

• No waiting period options: Some final expense companies offer no waiting period plans that fully insure you 100% for natural or accidental death. It’s important to remember that you must qualify for an immediate coverage life insurance plan. You won’t have to take a medical exam, but you will have to answer medical questions (and be approved). All plans without health questions have a two-year waiting period.

• Living benefits with most policies at no extra cost: Most burial insurance plans offer a living benefit called the “Accelerated Death Benefit Rider.” You never pay for this rider. It’s always free. These riders allow you to access up to 50%-100% (varies by company) of the death benefit while alive if you’re diagnosed with a terminal illness and given a life expectancy of 12 months or less.

• Fixed death benefit: The coverage is guaranteed never to decrease.

• No health questions plans are available: One of the biggest pros of final expense insurance is that there are plans available that don’t require you to complete a health questionnaire. These policies are commonly called “guaranteed issue life insurance.” In short, you’re guaranteed approval regardless of your previous health issues. Bear in mind that these policies all come with a two-year waiting period. The insurance provider will only refund your premiums if you die during the waiting period.

• Small coverage options: The best final expense companies offer very small death benefit options. Some will go as low as $1,000 in coverage.

• Lenient underwriting: Life insurance companies built these plans to accept applicants with a host of pre-existing medical conditions. That means seniors with diabetes, high blood pressure, and many other health conditions won’t be denied coverage. You don’t have to be in good health to qualify.

• Fast claim payments: Insurance companies typically pay out the death benefits within 24-48 hours once they approve a claim. They know policyholders primarily purchase these policies to cover funeral costs, which they know is a time-sensitive issue.

• Virtually all ages are insurable: Funeral insurance plans are available to children as young as 14 days old. On the other end, seniors over 85 can still qualify for a new policy. In many cases, burial insurance is the only way seniors over 80 can get life insurance.

• Lots of provider options: There are dozens of life insurance companies that offer final expense insurance plans. Having more options means you have a better chance of securing the lowest rate possible.

• Quick approvals: Most final expense insurance applications render approvals within minutes.

• A variety of application process options: There are multiple ways to complete a final expense insurance application. Generally, you can apply 100% over the phone, via email, directly online, or through the mail (paper application).

• Multiple payment modes: Most companies will allow you to make your premium payments monthly, quarterly, semi-annually, or annually. In most cases, you cannot mail in monthly payments. To pay monthly, you must do it via an automatic deduction from a checking or savings account (no pre-paid cards) on a day you choose. Some insurers will allow you to pay with a Direct Express card, but not many. For example, Transamerica and Prosperity Life Group will automatically withdraw monthly payments from a Direct Express card.

• The money can be used for anything: Since final expense coverage is a type of life insurance, the final result will merely be a tax-free cash payout. Your beneficiaries can spend the money on anything. There are absolutely no restrictions. That means they can pay for your funeral expenses, medical bills, credit cards, or other debts. Also, any unused money stays with your family.

• You can name any beneficiary(s) you want, even a funeral home: You decide how many beneficiaries you want. It’s best to name people, such as a loved one, as a beneficiary. However, you can designate a funeral home as the recipient of the funds if you’d like. Also, you can name multiple primary and secondary (contingent) beneficiaries. Lastly, you can change and update your beneficiaries anytime you want in the future.

• Someone else can pay for it: Someone else, such as a family member, can pay for your coverage. Children buying life insurance for their parents is quite common. Essentially, anyone else (even if they aren’t related to you) can be the payer of your policy so long as you agree to it.

• Cash value that grows over time: A burial policy is a type of whole life insurance that builds cash value. A small portion of each payment is directed to this account, and it usually earns interest. You are free to borrow from the money that accrues in the cash value account. Also, if you ever cancel your coverage, the insurer will refund you the policy’s cash value.

• Most policies have automatic lapse protection: Most companies include an Automatic Premium Loan Provision (APL) at no extra cost. If your policy has this feature, it will prevent your coverage from lapsing due to non-payment. The APL will automatically draw from the accrued cash value to make the premium payment(s) to keep your policy active.

• Tax-free benefit payout: A funeral insurance policy will always pay out a cash benefit tax-free. Your beneficiaries will not be subject to a tax burden from the IRS.

• It can be used as a charitable gift: The proceeds from a final expense policy can be a generous gift to a loved one or charity. The money does not have to be used for funeral expenses. Remember, the policy will pay out cash that can go to anyone and be used for anything.

The Cons Of Final Expense Insurance

The Bad

• Multiple names that often leads to confusion: Final expense plans have many alternate labels that can confuse some shoppers. The terms “burial insurance,” “funeral insurance,” and “end-of-life insurance” are all synonymously used by companies that market these plans. Know that all these names mean the same thing.

• Beneficiaries can use the money any way they want: As mentioned before, your beneficiaries can spend the death benefit money on anything. They don’t have to spend it exclusively on funeral expenses. That can present challenges if you don’t have a person you can trust as your beneficiary.

• Large amounts of coverage aren’t available: Final expense insurers often limit their exposure to a maximum death benefit of $25,000 or $50,000. A burial insurance plan is likely not for you if you need a high amount of coverage, such as $100,000 or more. You’d either need to A) buy multiple burial policies or B) buy a traditional life insurance policy for a large amount.

• Premiums are more expensive than other types of life insurance: Funeral policies are generally more expensive (per thousand of coverage) than other types of life insurance.

• It may not be enough to cover all your funeral costs: A burial insurance policy does not contractually stipulate what your final wishes are or the net cost. Instead, the policy only provides a quick cash payout to your family so they can pay for your funeral. If you don’t have enough coverage to pay your funeral bills, your heirs will have to pay for the remaining amount. That’s why using a funeral cost calculator or a similar tool is useful to select the right amount of coverage.

• Misleading marketing is abundant: Final expense life insurance ads are on television, in the mail, and online. Sadly, dozens of companies regularly use deceptive marketing to confuse, mislead, and sometimes scam shoppers. The Colonial Penn $9.95 plan is one such example. Their ads give the impression that seniors can buy ten or twenty thousand dollars of coveragefor just $9.95 monthly. However, the truth is that most seniors get less than $1,000 of coverage for $9.95 when they buy from Colonial Penn. Other common examples include ads that say things like “free funeral insurance,” “Coverage starting at just $10 per month,” “Policies cost just pennies per day,” “new state-regulated life insurance program,” or “government burial insurance.” While those statements aren’t technically a lie, they are very close to it. People who see these ads think they really can get very cheap burial insurance or coverage provided by the government (the VALife program for disabled veterans is the only type of government coverage). Please don’t take these ads seriously because 99% of the time, they are not a realistic representation of the true cost.

• Some scandalous agents hide the truth about critical policy details: Every business has its fair share of bad apples, and insurance is no exception. There are a variety of final expense insurance scams that bad agents will employ to make money, so it’s important to protect yourself.

• Most options are only sold through agents: Most burial insurance companies do not sell their plans directly to consumers. Instead, they rely on licensed insurance agents to market their products. Generally, the only time you can purchase directly from a life insurance provider is via a guaranteed acceptance policy that includes a two-year waiting period. There are some anecdotal exceptions to that rule, of course. Globe Life and TruStage are two such examples. But by and large, most insurers mandate that you work with an agent, which some consumers would rather avoid.

• Final expense insurance is life insurance: Burial insurance is life insurance (read: burial insurance vs. life insurance). If you already have a life insurance policy, you can rely on it to pay for burial costs. Some people think there is insurance to cover burials that isn’t life insurance. That simply is not true. A burial only happens when a life ends. That’s why an insurance policy to cover final expenses will always be life insurance coverage.

• Your premiums could one day exceed the death benefit: While uncommon, your total premiums could exceed the death benefit if you live a very long time. Generally, you’d have to live to be 90 years old or older for this to happen.

How Does Final Expense Insurance Work?

In short, a final expense life insurance policy is a small whole life insurance plan meant to pay for your funeral expenses.

Because its whole life, there are no price increases over time, and the policy cannot expire at any age.

Upon your passing, the insurance company will disburse the proceeds to the beneficiaries of your choice. That gives them the money to cover your end-of-life expenses.

Policies vary greatly from company to company. Comparing multiple plans to ensure you find the right one to suit your needs is critical.

Final expense insurance for seniors is a type of whole life insurance policy primarily meant to cover end-of-life costs. No medical exam is required, and seniors with pre-existing conditions still qualify. When you die, the policy pays out quickly so your loved ones can pay for your funeral and other final bills without going into debt themselves.

How Does Burial Insurance For Seniors Work?

Senior burial insurance is a type of no medical exam whole life insurance policy meant to pay for your burial and other final expenses.

The death benefit pays out quickly to your loved ones, providing them with the money necessary to pay for cremation costs, burial costs, funeral services, outstanding debts, medical bills, credit card debts, or anything else required after death. Also, your beneficiaries can keep any money they don’t use on funeral expenses.

Tip:

Burial insurance is also frequently called “final expense insurance” or “funeral insurance.”

Because a burial policy is a type of whole life insurance, it’s permanent coverage with fixed premiums. Also, the death benefit won’t decrease, and it builds cash value. The coverage amounts are generally smaller- usually $50,000 or less.

One of the most unique elements of a burial insurance policy is the lenient underwriting. Despite severe health issues, seniors can still qualify for a new policy, which is not true for traditional life insurance policies.

There are two types of final expense insurance plans for seniors. Be sure to consider the pros and cons of each option when choosing which plan is best for you:

• Simplified issue: These plans are the least expensive and can offer immediate peace of mind because the full death benefit pays out starting on day one (no waiting period). You don’t have to take a medical exam but must answer health questions. Simplified issue policies are often called “no exam funeral insurance.”

• Guaranteed issue: Commonly referred to as “guaranteed acceptance,” these plans have no health questions because your approval is guaranteed. They have higher premiums than simplified issue policies, and there’s always a two-year waiting period for non-accidental death. If you die during the waiting period, the insurance company will only refund your premiums plus a tiny amount of interest.

What Expenses Can Burial Insurance For Seniors Cover?

A senior burial insurance policy can cover all the expenses associated with your funeral plans, including:

• Funeral costs

• Headstone or other memorial monuments

• Medical bills

• Transportation expenses

• Outstanding debts or other bills

Also, any money your loved ones don’t spend on your final expenses is theirs to keep.

How To Get Funeral Insurance For Seniors With No Waiting Period

To obtain a policy with no waiting period, you must, at minimum, answer health questions. You don’t have to complete a medical exam, but you will have to complete a health questionnaire.

Tip:

There is no such thing as guaranteed acceptance with no waiting period.

Remember that most people, despite past health ailments, can qualify for immediate coverage. You don’t have to be in good health.

Don’t mistakenly assume you will have a waiting period due to your past ailments. Unless you have a terminal illness or dementia, you can probably qualify for an immediate coverage policy.

If you want a plan that immediately covers you, call us at 1-800-644-2926. We have over 15 different insurance companies that we partner with.

If immediate coverage is possible for you, we’ll find it.

How Much Does Senior Final Expense Life Insurance Cost?

The average cost of funeral insurance for seniors is about $50-$100 per month for a $10,000 policy. All life insurance rates vary based on your health, age, gender, state of residence, and the amount of coverage you buy.

How To Find The Best Burial Insurance For Elderly People

No matter what product you’re buying, it’s no secret that you should compare offers from multiple companies before you commit to one.

The same is true when looking for an affordable final expense policy for seniors.

In the end, if you want a life insurance policy with no waiting period at the lowest price possible, you will need to speak with an agent.

It’s helpful to remember that most final expense insurance companies that sell coverage directly to the consumer online or via mail usually impose a two-year waiting period before you’re insured because they are selling you guaranteed issue life insurance (which always has a waiting period). Colonial Penn is one such example.

Generally speaking, only licensed agents can offer the best rates and plans that pay out the full death benefit immediately.

But don’t speak with just any insurance agent. Here are the criteria you should look for when selecting an agency to work with:

• Independence: Be sure to work with an independent agency with access to at least ten insurance companies. They will compare offers from multiple providers to match you with the best one so you can save money. It’s highly advisable to avoid “captive” insurance companies. Captive insurance companies do not allow their agents to offer coverage from any other provider. State Farm is an example of a captive company. State Farm agents can only sell you State Farm insurance. Similarly, Lincoln Heritage Funeral Advantage is another non-independent company because they typically don’t allow their agents to offer any other insurer. So be sure to work with a broker who can choose from dozens of insurers to find the best one for you.

• Reputation: Check their online reputation to ensure past customers were satisfied with their service. A bad online reputation usually indicates lousy insurance products and poor customer service.

• Expertise: It’s hard to be a jack of all trades in the insurance business. Be sure to find one that specializes in funeral insurance for seniors. That way, you know you’re dealing with an expert rather than a novice.

An honest independent agent is your surest path to finding the best life insurance for seniors.

Be Wary Of Buying A Term Life Insurance Policy For Final Expense Coverage

Buying a term life insurance policy to cover end-of-life expenses is risky.

Tip:

Term insurance is a type of policy that will terminate at some point. If you outlive a term policy, the coverage ends, and the insurer keeps your money.

At the latest, a term life plan will generally expire around age 80.

AARP’s final expense insurance is a prominent example of a term life offering for burial coverage. Their primary policy is a term plan that completely expires once you turn 80.

Globe Life Insurance is another option that expires in your 80s.

Both AARP and Globe have the same marketing tactics. They dazzle seniors with their lower-cost term life insurance, hoping they’ll be attracted to the lower prices (which they usually are).

Because term insurance expires, it will always have less expensive premium payments than whole life.

They are counting on policyholders never stopping to consider why the insurance is cheaper.

Sadly, many unsuspecting consumers fall for that trick. Then, on their 80th birthday, they learn the truth because they get a letter telling them they are uninsured.

If you need a life insurance plan to cover the cost of a funeral, you should opt for the peace of mind that permanent life insurance offers.

Term insurance will likely lead to a financial burden for your family members because they will have to pay for your burial costs.

So be very wary of AARP life insurance for seniors for these reasons.

Coverage For Elderly Parents

In short, you can buy funeral expense insurance for your parents or grandparents.

Here’s what you need to know:

• They must agree to the policy being issued. You cannot buy life insurance for a parent without their knowledge and consent. If your parents do not want to participate, just put money into a savings account or buy a pre-paid burial from a funeral home. Even if you have power of attorney, they must still answer the questions and consent. Under no circumstances can you do it for them.

• They’ll need to answer health questions if you want immediate coverage for them. You should gather some details about their past and current health issues before speaking with an agent. With their health information, your agent can determine which company (if any) will approve them for an immediate coverage plan.

Just know that you don’t need your parents on the phone when you initially speak with an agent.

The Cost Of Final Expense Insurance

The average cost for a burial insurance policy is approximately $50-$100 monthly for roughly $10,000 in coverage. Multiple factors determine the net price, including your exact age, health, tobacco usage (if any), the type of policy, state of residence, and how much coverage you buy.

KEY TAKEAWAYS

• Policies with health questions typically cost the least compared to guaranteed acceptance (no health questions) options.

• Prices on TV and other advertisements are incredibly misleading and not close to what burial insurance actually costs.

• Because term life insurance plans from companies like Globe Life or AARP typically expire around age 80, they always cost less than whole life burial policies.

How Insurance Companies Determine The Cost Of Final Expense Life Insurance

How much final expense insurance costs is based on a few variables. Remember, your price will not be the same as someone else (unless they are nearly identical to you).

Cost Factors for Final Expense Insurance

Gender

Men will always pay about 30% more than women for life insurance products because, on average, men don’t live as long as women. The only exception to that rule will be if you live in Montana. Due to Montana state regulations, life insurance companies cannot charge men and women different rates.

Age

Since burial insurance is a type of life insurance, your age heavily influences the price. The older you are, the more your life insurance coverage will cost. Most companies will have set life insurance rates for each specific age. For example, they will have a unique price for age 51, age 52, then age 53, and so forth.

However, some companies (not many) set the pricing according to age brackets, charging the same premium for anyone within a specific age range. For example, they will designate one price for anyone aged 50-55 or 75-80. It’s not common, but it does happen. AARP funeral insurance is one such policy priced using a bracket system.

Learn more about life insurance for seniors of various ages:

• Over age 50

• Over age 60

• Over age 70

• Over age 80

• Over age 85

Type of policy

There are two main types of life insurance- term life and whole life. A term life insurance policy is a temporary policy that generally lasts until age 80. Additionally, the price will often increase every five years. For example, Globe life burial policies and AARP life insurance plans have a cost increase every five years, and the policy completely terminates when you turn 80 years old.

Alternatively, whole life is a type of permanent life insurance that lasts forever, and the cost cannot increase over time. Comparatively, term life will always be cheaper than a whole life policy because term coverage expires around age 80.

Tip:

When a term life policy expires, you don’t get any money back. You’re simply uninsured and must find a new policy elsewhere.

There are two policy types of whole life final expense insurance plans: simplified issue and guaranteed acceptance. Guaranteed issue life insurance products have no health or lifestyle underwriting. There are no health questions or exams, which means you cannot be denied because of previous health conditions.

Because your approval is assured, there is always a two-year waiting period. Death during the first 24 months will mean that your beneficiaries only get a refund of your premiums plus interest (often 10%).

Now, plans with health questions (simplified issue) are ones that you qualify for based on your health. There’s no medical exam, but you can be declined or approved for a program with partial coverage, full coverage, or a waiting period.

From a cost perspective, guaranteed acceptance plans are priced based on your age, gender, and how much coverage you buy. However, simplified issue plans factor into your health and tobacco habits to determine the cost. In most cases, simplified issue plans without a waiting period are cheaper than guaranteed issue policies.

Health (if seeking a no-waiting period plan)

Most companies selling burial insurance with no waiting period have their product broken down into one to three health classifications. Each health rating carries a different price structure.

An insurance company’s best health rating will cost the least. Their middle-tier rating will be more expensive, and their last one will be the costliest.

Here’s a breakdown of the common names used to describe the various health ratings from different burial insurance companies:

• “Level” or “Preferred”: Plans with these names will have the lowest possible cost and no waiting period. Generally, you’ll need to be in moderate to good health to qualify for these ratings.

• “Graded” or “Standard”: These words usually refer to a company’s middle-tier rating. Typically, you would have to answer yes to at least one question on an application for a provider to offer this type of plan. These plans will always cost more than a level or preferred rating. Typically, a graded plan has partial coverage during the first two years (Prosperity Life is one example). However, some companies use “graded” to describe a policy with a full two-year waiting period (Mutual of Omaha is one example). Just remember that every company uses these words differently.

• “Modified” or “Basic”: These words always refer to the most expensive health rating possible. You would need to have severe health issues for an insurer to offer this type of plan to you. Not only will this plan cost the most, but it will always come with a two-year waiting period.

It’s also helpful to remember that your health will dictate how much coverage you can buy. Let’s use Mutual of Omaha as a real-life example. They have two different health ratings. For their Living Promise final expense policy, here are the coverage amounts available at each of Mutual of Omaha’s health ratings:

• Level: $2,000 – $50,000

• Graded: $2,000 – $20,000

Virtually every burial insurance carrier will have similar rules about how much coverage they offer for each health rating.

Tobacco usage

Cigarettes significantly reduce life expectancy, so smokers always pay more for life insurance products. If you chew, smoke a pipe, smoke e-cigarettes, or smoke cigars, some companies will offer you a non-tobacco price.

Amount of coverage you select

How much life insurance you want will heavily affect the cost.

All other factors (gender, age, tobacco usage, health) will ultimately determine your final expense insurance premium per $1,000 in coverage. Then it’s multiplied by the death benefit amount you want to determine the final cost.

For example, let’s say your cost per $1,000 comes out to be $4.43 per month. If you wish to get $15,000 in coverage, that would carry a monthly premium of $66.45 per month (4.43 x 15). It’s all proportional, too. A $25,000 whole life burial policy will cost about five times a $5,000 policy. The bottom line is that the more coverage you buy, the higher the price.

State of residence

Your state of residence determines which companies are available to you because providers pick and choose which states they offer their products in. For example, about 90% of final expense insurance companies avoid New York due to the excessive regulatory environment.

Additionally, women who live in Montana will pay a higher price due to a law that forces insurers to charge men and women the same rate. Because of that, insurance providers charge females the same price as men (about 30% more than women). In all other states, women would pay a lot less.

What About Very Low Prices Seen On TV For $9.95 Or “Pennies Per Day”?

Final expense insurance companies that advertise on TV, online, or via mail regularly highlight teaser rates that aren’t remotely close to reality. Never believe any price quoted in a paid advertisement.

The actual cost of a burial insurance policy will significantly differ from the prices you see on TV or hear on the radio.

Remember that any time companies make claims such as “Starting at $10 per month” or “Coverage for just pennies per day,” they’re quoting a young, healthy person seeking $500-$1,000 in coverage. That’s how they arrive at the low price they’re quoting.

For example, the 995 plan from Colonial Penn provides just $1,000 in coverage for a 70-year-old female. Colonial Penn ads give the impression that you’ll get a $10,000–$20,000 death benefit for $9.95.

But when you check a Colonial Penn rate chart, you immediately see that’s not the case. Also, never believe highly deceptive ads that make it appear as though you can get:

• Free burial insurance for seniors

• Government burial insurance

• State regulated final expense insurance

None of those are true. If you want to know how much final expense insurance costs, use this quoting tool. It will show you accurate prices from up to 25 companies in your state.

Typical Funeral Expenses To Consider

The amount of coverage is a significant variable that influences the cost of a final expense policy. For that reason, estimating your funeral expenses is essential so you know approximately how much coverage you’ll need.

According to the National Funeral Directors Association (NFDA), some of the ordinary funeral expenses may include but are not limited to:

• Funeral home services: $2,495

• Body transportation: $395

• Burial plot: $3,581

• Metal casket: $2,500

• Embalming: $845

• Grave markers or headstones: $1,000

• Vault: $1,695

• Memorial services: $550

• Viewing: $475

• Opening and closing of the grave: $1,000

• Flowers: $100

• Cremation fee: $400

• Urn: $295

Additionally, there may be other end-of-life expenses to pay for outside of the funeral costs, such as:

• Mortgage

• Credit card debt

• Other outstanding debts

• Attorney fees

• Medical bills

• Automobile loan

• Other unsecured debt

When setting up your policy, you should consider all these variables to know you have enough coverage to pay for burial expenses. The average cost of a funeral is roughly $10,000. Cremation costs are typically about $7,000.

Unless you have an extravagant funeral, you won’t need a $50,000 or $100,000 policy to cover those expenses. $5,000-$20,000 should suffice. It’s also helpful to consult a funeral cost calculator to estimate your burial costs accurately.

How Much Does Cremation Cost?

The National Funeral Directors Association reports that the average cremation costs $6,280, which includes a viewing and funeral service. However, if you forgo memorial services and immediately cremate the body (direct cremation), the average cost drops to roughly $1,924.

Average Cremation Costs By State

According to the National Funeral Directors Association, the median cost of a cremation is $6,280, including a funeral service and body viewing.

Cost Of Cremation Vs. Burial

Cremation pricing is much lower than traditional burial, which is why Americans are increasingly choosing cremations vs burials. The NFDA estimates that the cremation rate is expected to be 60.5%. In contrast, they expect burials to account for only 34.5% of funerals. Furthermore, the NFDA anticipates that cremations will account for 80% of funeral types by 2045.

The median cost of a cremation service with viewing is $6,280. However, if you opt for a basic cremation (the cheapest type), the average price drops to $1,924.

According to the NFDA, the average cost of a traditional funeral burial service with a viewing is $8,300 or $9,995 if you add a vault. The average price of a direct burial is $5,114, and green burials cost roughly $2,250.

How To Reduce The Cost Of A Cremation

Even though cremation funerals are cheaper than burials, they can still get very costly, depending on your preferences. Here are some functional ways to save money on a funeral:

• Shop around — Call at least five funeral homes or crematories for price estimates. Funeral homes, by law, must give you prices over the telephone if you ask. You’ll also need to arrange for the transfer of the body from the place of death to the funeral home or crematory. Check with multiple providers to ensure you get the best price possible.

• Get a general price list (GPL) — The FTC’s Funeral Rule grants you certain rights when shopping for cremation options. One such right is to see a General Price List(GPL) that spells out their crematory fees and the cost of all their products and other services.

• Make your budget unknown — Don’t tell any providers how much you can spend. Otherwise, they might offer a cremation package that matches your budget.

• Buy the urn somewhere else — It is your right to buy a cremation urn from a third party. By law, they must accept products from other providers. You can find affordable urns from online stores such as Amazon or Costco.

• Rent the casket for viewing instead of buying it — If you opt for a wake (viewing), you’ll need a casket to showcase the body. Funeral homes usually offer rental caskets for $750-$1,500. Comparatively, caskets can cost from $2,000-$10,000 on average if you buy one.

• Conduct the memorial at a private residence — Upon completing the necessary paperwork, holding a viewing ceremony of the deceased at your home is perfectly legal so friends and family can pay their last respects to the departed. Keep in mind that you’ll need to pay for the transfer of remains from your home to the crematory.

It’s wise to become familiar with all your rights under The Funeral Rule to ensure you get the best price possible for your desired service.

What You Can Do With The Ashes, Including The Cost

After the cremation process is complete, you must decide what will happen with the ashes. There are dozens of options, most of which are unknown to the general populace.

• Keep the cremains at home ($70-$2,250) — This is the most common option. You store the cremated remains in an urn and place them on a mantle or other place in your home for safekeeping. The only cost you incur is that of the urn.

• Keepsake urns ($25-$60) — These are tiny urns meant only to hold a portion of the cremains. The idea is that family members will all have their own keepsake urn to retain a part of their departed loved one.

• Scatter the ashes ($100-$1,000) — Some people want their ashes scattered as their final resting place. Many state and local governments have strict rules about scattering human cremains. It would be wise to check your local laws before scattering any ashes.

• Scattering gardens ($100-$1,000) — Some cemeteries have specific gardens set up where you can spread the deceased’s ashes.

• Scatter in water ($100-$1,000) — Dumping the ashes in a body of water is often called a “burial at sea” or “water burial.” You essentially drop a biodegradable urn (with the ashes inside), so it can dissolve in water. Or you can dump the raw ashes directly in the water. Check your state and local laws before disposing of cremains in a body of water. Many states have regulations that govern if and how you can spread human ashes in water.

• Burial (350-$3,000)– While uncommon, some people opt to bury the cremains. There may be additional fees if you work with a cemetery that requires an urn vault.

• Store in a columbarium or mausoleum ($1,000- $60,000) — A columbarium is a building that has little niches meant to hold urns. A mausoleum is a small house-like structure meant to store caskets or urns. Some mausoleums are very large and extravagant, making them extremely expensive.

• Cremation jewelry ($1,250-$13,200) — You can have a small portion of the ashes mixed in with the materials necessary to make a ring, pendant, or another piece of jewelry.

• Vinyl record ($2,250) — The ashes can be pressed into a vinyl record that plays whatever music you want.

• Tattoo ($200-$500) — The tattoo artist will add a small amount of the cremains to the ink. Then, they apply the tattoo like normal.

• Painting ($100-$1,000) — An artist will mix a small amount of the ashes into their paint.

• Space ($5,000-$12,500) — You can pay to have your ashes ejected into space.

• Coral reef ($4,500-$7,500) — Companies like Eternal Reefs use some of the ashes when they construct an artificial reef formation. Over time, this will attract and grow into an entire reef system in the ocean.

• Fireworks display ($400-$5,000) — Some ashes will be incorporated into the fireworks.

• Memorial tree ($6,700-$25,000) — Companies like Better Place Foresters will integrate some of the ashes into the soil near a dedicated tree that you select. They’ll also place a permanent marker on or near the tree, signifying who lies there.

There are many more options, including having your ashes dropped out of a plane.

Ways To Pay Cremation Expenses

Pre-planning your funeral is an act of love. Everyone should do it so that surviving loved ones don’t have to make hasty decisions under great emotional duress.

That said, how the funeral will be paid for is another critical funeral planning step. You cannot rely on Social Security because they only provide $255 after someone dies. Also, most states don’t offer financial assistance via Medicaid.

Here are the most practical ways to pay for the cost of cremating a person.

• Buy cremation insurance — A cremation insurance policy is a small whole life plan to pay for cremation costs. These plans last your entire life, and the monthly premiums remain level. After you die, your beneficiaries will get tax-free funds from the insurance company. There are no restrictions on how they spend the money. That means any unused money is theirs to keep. Bear in mind that a death certificate is required for your beneficiaries to be able to collect the money.

• Setup a pre-paid funeral — A pre-paid funeral plan is an agreement directly with a local funeral home. After you design your entire funeral, they will inform you of the net cost. There are a few different payment options. First, you can pay it all in cash and be done with it. You can also opt for monthly payments over many years. Once you pass away, the funeral home will execute your final wishes as you’ve designed. Pre-planning is very different than a final expense insurance policy. With a final expense policy, you typically name people, not the funeral home, as the beneficiary.

• Put money in a savings account — If you’re a disciplined saver, you can reliably put money into a savings account to one day have enough to cover the total cost. The money in this account should be explicitly earmarked for your final expenses. You must not touch this money when you encounter financial emergencies. Otherwise, life will happen as it always does, and then you’d have no money to pay for your cremation service. Also, it’s helpful to have someone else named on your account. If not, your bank account will be subject to the probate process. That would render the funds inaccessible for many months until probate is complete.

• Set up a POD account — A Payable on Demand Account is a unique bank account that includes a beneficiary(s). The money in the account will automatically be disbursed to your beneficiaries upon death. Ensure that your beneficiaries are aware of this account so they know to file a claim after your passing.

• Use existing life insurance — All types of life insurance payout cash to your beneficiaries. There is no reason the proceeds from existing life insurance cannot be used to pay for your cremation expenses. In fact, covering burial and final expenses is the #1 reason Americans purchase life insurance. Just be sure that your current life insurance won’t expire before you do. Some life insurance, such as term life, will expire after a specific number of years. Ideally, you want permanent life insurance if you’re counting on the policy to pay for your funeral bills. Many life insurance companies sell policies dedicated to paying just for final expenses. They’re often referred to as “burial life insurance” or “senior final expense life insurance.” Before making your final decision, compare offers from the best funeral insurance companies to find the policy that best meets your needs.

• Liquidate assets after death — Essentially, your family sells your real property and other items you own. That is the least ideal option because of how long it can take to sell off your assets. More than likely, your entire estate will likely need to go through the probate process (which can take months) before anyone can sell your valuables.

How To Get A No-Cost Cremation Via Donating Your Body To Science

If a funeral ceremony, memorial, or unique disposal of your ashes does not interest you, consider donating your body to science. If they accept you, they will cremate your body and return the ashes to your family free of charge.

You should be aware that some people will not qualify for a body donation.

For example, Mayo Clinic reports that you won’t be eligible if you have certain infectious diseases such as Hepatitis or HIV.

It’s important to remember that every organization that has a body donation program sets its own guidelines.

For example, Science Care would deny you because of an extremely high or low BMI.

If you plan to donate your body, it would be wise to ensure the receiving organization will accept you.

Cremation Vs. Burial: Costs And How To Choose

Cremations turn bodies into ash within hours or days and generally cost less than traditional burials, which place the body in the ground to decompose over a long period of time.

Choosing the after-death care of a loved one’s body is a difficult, deeply personal decision. There are several important factors to cover when you compare cremation vs. burial services, including:

• Cost: Cremations are 12.21% cheaper than burials in the U.S.

• Culture: Culture and religion heavily influence funeral practices.

• Sustainability: Each practice has a different environmental impact.

• Memorials: Burials are typically permanent resting places, while ashes can be scattered, stored, or repurposed.

Below, we cover these key considerations and answer your questions to help you make the right decision.

Cremation Process And Memorials

Cremation uses heat, chemicals, and other means to reduce a body to ash in a relatively short period. Direct cremation is more traditional and uses high heat and flames to cremate the body in one to four hours.

Water cremation is an environmentally-conscious alternative that uses liquids and chemicals to cremate the body in three to 18 hours. The reduced temperatures require less energy and produce sterile ashes better suited for eco-memorials, like green burials.

Regardless of the cremation treatment you choose, the cremation procedure is as follows.

1. Identification of the body and cause of death.

2. Authorization for cremation.

3. Preparation removes jewelry, medical devices, and other inorganic items.

4. Cremation reduces the body to ashes.

5. Finalization removes remaining inorganic materials and grinds bone fragments and remains to a fine ash.

6. Transfer moves the ashes to an urn to return the remains to the authorized family or individual.

The ashes can be kept in a memorial urn, transferred to other urns to share with family, spread in a meaningful location, or even repurposed into jewelry, sculptures, tattoos, and more.

Burial Process And Options

Direct burial is a simple process that places the body into a casket or other vessel before burying them together. Most people are buried in a cemetery or placed in a mausoleum with a ceremony, but natural burial sites and private family cemeteries are alternative options.

While direct burials are simple, they often follow an embalming treatment that preserves the body. This provides extra time for families to make arrangements or host final viewings and funerals before the actual burial.

The burial location is marked with a headstone or other marker. This designates the space as a grave and provides a memorial for friends, family, and loved ones to visit for decades, even centuries to come.

Is It Cheaper To Be Buried Or Cremated?

Direct cremations cost less than direct burials, averaging $2,195 and $5,126 respectively. Generally, the cremation process doesn’t require caskets, gravesites, headstones, or embalming, so it’s cheaper than direct burial.

Processes vary by personal preference, so costs can fluctuate. This is especially true if you’re planning a funeral service, where transportation costs, service fees, flowers, and catering come into play.

Still, the median cost of a funeral with cremation is $6,280 — 37% cheaper than a funeral with burial at $9,995. These savings are a leading contribution to cremation’s increasing popularity.

Factors To Consider

Cost, culture, family, and personal preferences all play a part in your final cremation vs. burial decision. If you’re still looking for guidance, read through the considerations below to weigh all of your options.

Cultural and religious traditions

Cultures and religions handle bodies and the end of someone’s life differently. Many people choose between cremation and burial, considering familial and cultural traditions.

Hindu, Buddhist, and Sikh people traditionally cremate their dead for different reasons.

On the other hand, Islamic, Mormon, and Orthodox Jewish people typically bury bodies. In some cases, cremation is even prohibited or strongly discouraged in these religions.

Traditions also dictate other funeral rites, like Jewish cultures that bury their dead within three days, while Swedish law allows up to one month for burial — and they used to take longer.

Memorial preferences and accessibility

Consider who wants access to a memorial and how you can best accommodate loved ones with your end-of-life decision.

Burial spots are a set location that anyone can visit. U.S. burials are often permanent, so the grave will be there for decades or centuries. However, your burial site may not be accessible for distant loved ones or people with disabilities.

Cremated ashes are more flexible. You can split them among individuals and families to keep or spread as they like. Alternatively, you can place ashes in a columbarium or spread them in a special location to act as a memorial or burial site. However, ashes are often kept privately and may be lost over time as people move or pass themselves.

Environmental impact

Sustainable burial alternatives are increasingly accessible, and a recent survey found that 60% of respondents are interested in green funeral options in 2023. You can make sustainable choices for both burials and cremations to reduce your environmental impact.

Green burials don’t embalm or otherwise treat the body with chemicals, and you can opt for a natural burial site and untreated vessel, like a simple wood casket or linen shroud. This reduces how much chemical pollution a burial releases into the ground.

Environmentally-friendly cremations use chemicals and water instead of high temperatures to reduce remains to ash. This type of cremation requires less energy and produces sterile ashes that are safer for the environment.

End-of-life budget

Funerals are expensive, and covering all of the service and treatment costs can be challenging. Especially if you’re planning for a sudden death or the person doesn’t have insurance.

One of the largest funeral costs is the casket, and a metal burial casket averages $2,500. Burial expenses, including the casket, embalming, and gravesite, are about 12% more expensive than a cremation. So opting for a funeral and cremation can save thousands.

Final Expense Insurance For Burials Or Cremation

Cost is often a deciding factor between cremation vs. burial. While cremation is cheaper, you can plan ahead to cover the cost of your preferred funeral services with final expense life insurance.

How Much Does A Funeral Cost?

According to the National Funeral Directors Association, the average funeral costs $9,995, including a burial service, viewing, and vault. The average cost of cremation is $6,280, which includes a funeral service and viewing. Remember, however, that funeral costs vary Average Funeral Cost by State

Average Funeral Costs By State

According to the NFDA, the median cost of a funeral is $8,300, including the burial and viewing. If you add in a vault, the average cost of a burial funeral is $9,995. Alternatively, the median cost of a cremation with a viewing is $6,280.

Direct Funeral Costs

According to Funeralocity, the average cost of a direct funeral is $5,126, which is the cheapest funeral type. The national average cost of a direct cremation is $2,195.

With direct burial or cremation, the body is immediately buried or cremated with no viewing or memorial services of any kind.

Other Possible Expenses To Consider

Depending on your preferences, you may need to account for the following expenses adding to the total cost:

• Cemetery plots ($3,581 on average) — Plot costs vary wildly depending on your region of the country. Also, the specifics of the cemetery, its location, and its size all influence the cost of a burial plot. For example, some plots in Alaska cost as little as $775, while in California, they might run you over $7,000.

• Grave markers and headstones ($2,000 average cost) — A reasonable expectation for headstone costs is $500 to $3,000. Plain, flat grave markers usually cost hundreds of dollars rather than thousands. However, custom upright monuments or statues can cost more than $10,000, depending on the project’s complexity.

• Flowers ($50 to $80 per arrangement) — These are typical costs, but special flower arrangements could cost several hundred dollars.

• White doves ($150-$600) — Some families like to opt for the release of white doves as a symbolic way to acknowledge the departed’s transition to another life.

• Mausoleum — A mausoleum is a large, free-standing building that houses the body. Some people refer to mausoleums as “burials above ground.” These can be very expensive, often costing about $4,000-$5,000 for a basic one.

• Grave liner ($900-$7000) — A grave liner supports the soil to protect the casket. Some cemeteries make these mandatory.

• Interment fee ($300-$1,500) — The cost of the opening and closing of the grave.

Cost Of Burial Vs. Cremation

According to the NFDA, 60.5% of consumers are expected to opt for cremation, and 34.5% are projected to choose a burial service. By 2045, the NFDA expects the cremation rate to top 80%.

Consumers opting for cremation services at a higher rate is likely due to their lower cost.

The average cremation costs $6,280, whereas the average cost of a funeral with a burial is $9,995.

Remember that you can substantially lower these costs if you opt for a direct funeral, which is when you either bury or cremate the body with no memorial services of any kind. Similarly, green burials cost substantially less than traditional funerals, which is another option to save money.

The Funeral Rule- Know Your Rights

In 1984, the Federal Trade Commission established “The Funeral Rule.”

This law grants you the following rights when dealing with a funeral provider:

• Buy only what you select rather than having to accept the packages they offer you.

• Obtain price information over the phone.

• See a General Price List (GPL) that outlines the cost of all the various services and products the funeral home offers.

• See casket prices before physically seeing them.

• See a burial container (vault) price list if it’s not included in the GPL.

• Receive an itemized price list of your selections prior to paying.

• Get an explanation that describes any requirement imposed by a cemetery or crematory.

• You can use alternate containers (other than caskets) for cremation.

• You can buy a casket or urn from third parties.

• Embalming is not required.

The FTC created the funeral rule to ensure predatory providers don’t take advantage of grieving families.

Be sure to remember these rights if you find yourself making funeral arrangements.

Tips For Saving On Funeral Costs

Here are some practical ways you can significantly reduce funeral expenses:

• Ask for the general price list — All funeral homes must show you a General Price List upon request. Funeral homes are required to honor the funeral pricing shown on their general price list regardless of what they state verbally. Every price list will have a separate line entry for each item. It is your right to purchase only the services and goods you want.

• Shop around — Call four to seven funeral homes to get estimates on the services that interest you. Funeral homes are compelled (via the FTC’s Funeral Rule) to give you prices over the telephone.

• Keep your budget a secret — Don’t tell the funeral homes how much money you can spend. If they ask you about your budget, simply say, “I’m not sure, but it won’t be much. What’s the best you can do?”

• Consider buying a casket/urn separately — You aren’t required to purchase a casket, urn, prayer cards, obituary notices, or flowers directly from the funeral home. The funeral home typically up-charges all those items, and alternatives can be much cheaper. For example, Costco sells caskets and urns.

• Don’t insist on a viewing — Embalming and body preparation are often not required unless the body is not buried within a specific time. If the funeral needs to be delayed, refrigeration is usually an acceptable storage option instead of embalming.

• Consider a direct cremation/burial — With direct cremation, the cremation process is executed immediately without a funeral ceremony of any kind. Similarly, direct burials are burials without a service or funeral ceremony. Either option will reduce the cost by thousands of dollars.

• Have the memorial at home — You can opt to have the wake (viewing) at a private residence. That will alleviate basic services fees funeral homes charge for hosting the viewing at their facility. You also won’t have to pay for a service car to transport funeral attendees. However, you’ll still have to pay for a hearse to transport the body of the deceased.

• Consider an eco-friendly green burial — A green burial (aka “natural burial) is the internment of the body in such a way that decomposition is not inhibited. The goal is for the body to be naturally recycled. There is no embalming, burial vault, liners, or anything else that is not fully biodegradable. The cost of a green burial is much less than a traditional one. While a typical burial can cost upwards of $10,000, green burials can cost as little as $2,000.

• Hold a graveside service – Conduct the memorial service at the graveside instead of paying an additional cost to the funeral home to host the service in their facility.

A funeral cost calculator can be very helpful to create a baseline and budget. You can also print this official FTC checklist for funeral expenses and use it as you price shop or compare your options.

If a funeral home includes a fee not listed on the official FTC checklist, never be shy to ask what it is and why it’s there.

How To Pay For A Funeral

Proper funeral planning can help alleviate the massive financial burden for surviving loved ones who face these unexpected expenses.

Here are some of the best ways to prepare for final expenses:

• Put cash in a savings account — Put cash aside specifically to cover end-of-life costs. It’s vital that this money is never used for emergencies or any other life event. If you use it, it won’t be there to pay your funeral costs. Also, make sure the deceased is not the only person named as the account holder where the funds are being held. That would subject the funds to the probate.

• Get burial insurance — Purchase burial insurance (aka “final expense insurance” or “funeral insurance”) specifically to cover final expenses. These small face-value whole life insurance policies are explicitly designed to cover funeral costs. Final expense insurance premiums are affordable and are available for seniors, even those with pre-existing health issues. Some life insurance companies offer these plans with guaranteed approval, meaning your eligibility is assured regardless of prior health issues. It’s best to speak with an insurance agent who can evaluate all your insurance options and recommend the best burial policy.

• Pre-pay at a funeral home — A pre-paid funeral is a contract set up directly at a funeral home. It outlines all of your funeral preferences, including the net cost. The contract usually includes a “pre-need” policy as a funeral funding mechanism. It’s essentially a life insurance policy where the funeral home is the policy’s beneficiary. With a pre-paid plan, you cannot name your own beneficiaries. You can opt to pay the total cost of the contract in one lump sum. They’ll allow you to make payments if you don’t have the cash on hand to pay it outright. The installment periods are generally 1, 3, 5, or 10 years. Like paying off a financial loan over time, your total payments will surely exceed the total cost of the funeral if you opt to make monthly payments. Pre-paid funerals are a great way to document and pay for your final wishes if you can afford it.

• Sell off assets after death — Liquidate assets to acquire the funds to pay off the funeral bills. This option really should be a last resort because assets (property, 401(k), investments) must go through the probate process before they are accessible. For that reason, there will be a substantial amount of time between the date of death and when you’ll have the cash in hand to pay for the funeral. However, if all other options are unavailable, this might very well be the only way to pay off the final expenses.

• Set up a POD account — POD stands for “payable on demand account” (aka “Totten Trust”). It’s a unique type of bank account where the funds will automatically transfer to your chosen beneficiaries after you die. You can put your funeral funds in this account as a burial allowance. Then, when you die, your beneficiaries can access the money to pay for your funeral.

• Use existing life insurance — Every type of life insurance (term life insurance, whole, universal & final expense) pays out a tax-free cash death benefit to whomever you name as the beneficiary. The life insurance payout can be spent on anything, including burial costs. You’ll need a death certificate to file a claim.

The key is to think ahead about how much your funeral will cost. Get specific in your will about your wishes, and create a plan to pay for it. Then, make sure your family knows about your plans ahead of time.

Getting Financial Assistance If You Cannot Afford A Funeral

If you’re struggling with funeral expenses, you’re not alone.

Many grieving families get hit with a substantial financial burden after a loved one passes away. Thankfully, qualifying families can often get financial help from:

• State and local funding — Some state and local governments offer assistance to low-income residents who cannot afford a funeral. For example, Nevada County in California will pay for a low-cost direct cremation for qualifying residents. Every locality is different, so check what’s available in your state or local jurisdiction.

• Medicaid — Low-income families are often eligible for assistance from state-run Medicaid funeral assistance programs. Since individual states operate their own programs, you’ll need to see what’s available in your resident state. For instance, Michigan’s Medicaid program provides $475 for funeral services, $145 for a cemetery, and $100 to offset the vault cost. Rhode Island, similarly, pays up to $900 for funeral expenses via its Medicaid program.

• Department of Veterans Affairs — If your loved one was a veteran, you should be eligible for VA benefits. The current maximum VA burial allowance is $2,000.

• Social Security — Surviving spouses or eligible children can receive a one-time death payment of $255. Depending on your situation, you may qualify for survivor benefits from the Social Security Administration.

• National Association of Crime Victim Compensation Boards — Certain states offer financial assistance for funeral expenses to family members of a loved one who died from a violent crime. Check your state for more details.

How Prepaid Funeral Plans Work: Coverage + Pros & Cons

A prepaid funeral is a contract you set up through a funeral home to pre-design your entire funeral. It’s a great way to protect against inflation and you can pay it off in full or in installments.

KEY TAKEAWAYS

• A prepaid funeral plan allows you to pay in advance, either as a lump sum or in installments, for your funeral services.

• Plans typically cover the costs of a casket or urn, preparing the body, fees for the funeral home, and securing the death certificate.

• Positive benefits include protection from inflation, locking in your preferences for your funeral, and eliminating the financial burden on your loved ones.

• Potential disadvantages may include paying more than expected due to interest fees and facing challenges with moving the policy to another facility.

• On average, prepaid funeral plans may cost you anywhere from $2,000-$10,000, depending on your funeral preferences.

If you’ve ever been concerned about how your family would handle paying for your funeral, exploring your options for covering those costs in advance may bring you peace of mind. A prepaid funeral plan through a local funeral home will enable you to take control and ensure that your funeral arrangements are paid for and executed exactly how you want.

We spoke with industry expert J Scott Burke, a licensed funeral director and co-founder of FEX Contracting, to understand how prepaid funeral plans work, the benefits and disadvantages, and alternative options worth considering.

What Is A Prepaid Funeral Plan?

A prepaid funeral plan is an arrangement you make with a funeral home to pay for your funeral services and goods in advance. It’s like pre-ordering your own funeral and can be a smart addition to your estate planning checklist.

Locking in a prepaid funeral plan protects you from rising costs further down the road. Once signed, you can pay in full upfront, set up installments, or use a combination depending on your budget. Installment payment plans usually span over three, five, or ten years.

The primary providers of prepaid funeral plans are funeral homes themselves. They typically offer various plan options, allowing you to customize details and choose services that align with your wishes and budget.

Some life insurance companies may offer products specifically designed to cover funeral expenses. There also might be smaller independent funeral service providers in your area who offer prepaid options.

What’s Covered?

Prepaid funeral plans can cover various expenses related to your final wishes, including embalming, casket, funeral home costs, and more. The total dollar amount covered will depend on the total of the projected costs of your specific funeral. The amount could range from $2,000 to $10,000, on average.

The details will vary depending on the plan you choose and the funeral home you work with. Your prepaid funeral contract will list the items that are “guaranteed,” which means the cost of these items is guaranteed to be fully covered regardless of what they may cost in the future.

Commonly covered items include:

• Funeral home fees: This includes staff services, use of facilities for visitation or the ceremony, and administrative costs.

• Basic services: Embalming, dressing, and transportation of the body are usually included.

• Casket or urn: Depending on your choice (burial or cremation), the plan may cover the cost of the casket or urn.

• Death certificate fees: Handling the process of obtaining official death certificates can also be part of the plan.

Some plans might offer optional add-ons, such as:

• Funeral ceremony: Flowers, music, catering, and other ceremony elements can be included, depending on your preferences.

• Clergy or officiant fees: If you plan to have a religious ceremony, your prepaid plan can cover the cost of the officiant.

• Vault or burial plot: This typically needs to be purchased separately from the cemetery, though some plans might offer bundled options.

• Memorial service: Costs associated with a post-funeral gathering can be included in some plans.

Be sure to read your plan’s fine print before signing to understand what’s covered and any exclusions. Sales tax and gratuities may be added separately from your plan.

Types Of Plans

Not all prepaid funeral plans are alike. These are the three most common ways to set one up.

• Pre-need insurance policy: This functions similarly to life insurance but is specifically designed for funeral expenses. You pay the premiums over time, and the death benefit goes towards your funeral costs. Since it’s technically a type of life insurance policy with the funeral home as the beneficiary, there is a qualification component you must pass. The representative at the funeral home will ask you some questions about your health history, but you cannot be turned down. They will accept everyone regardless of what ailments you may have.

• Revocable trust: This allows you to set aside funds for your funeral in a trust account. You retain control over the money and can change the plan as needed. A major benefit of this option is that the funds in the trust typically avoid probate, expediting access to the necessary money for the funeral home. But, a revocable trust does not offer any tax advantages.

• Irrevocable trust: This option offers the strongest guarantee of protecting your funds for funeral expenses. You place your funds in the trust, and once established, you generally cannot take the money back. This also means the IRS or creditors won’t see that money as taxable income. The money can only be accessed once the trust’s predetermined circumstances have been met.

If you go with the pre-need policy option, the results of your health history screening results will impact how quickly your coverage could take effect. If you’re deemed healthy, you’ll most likely receive immediate coverage. The other result would be graded coverage, which means you’re not covered during the first 12 months.

During the 12-month waiting period for graded coverage, you would receive a refund equal to all the payments you’ve made (plus interest). After 12 months, 70% of the funeral expense would be paid out. The remaining 30% could still be paid out, but that is subject to the outcome of the contestability clause.

Pros And Cons

Like any investment, paying off your funeral costs in advance has potential benefits and disadvantages.

Pros

• Protection against inflation: You pay for everything upfront or in installments, locking in the cost at today’s prices and protecting your loved ones from inflation.

• Peace of mind for your family: Your family doesn’t have to worry about the financial burden or making difficult decisions during a difficult time. They can focus on grieving.

• Plan out your personal wishes: You get to decide what kind of funeral you want, including things like burial or cremation, the casket or urn, and any ceremony details.

• Payment options over time: You can better strategize how you’ll cover the costs associated with funeral planning.

• Option to plan for a loved one: You can set up a plan for someone else without them being involved. For example, if your parent or spouse is terminally ill, you can walk into a funeral home and preplan everything.

Cons

• Potential for Overpayment: If interest rates on the plan are lower than inflation, you could end up paying more into the plan than the eventual cost.

• Funeral Home Fees: Management and administrative fees associated with the plan can add up, especially with financed monthly payments.

• Limited Portability: Most plans are tied to a specific funeral home, and if you move or your family chooses a different location, transferring the plan might be difficult. (Setting up a revocable trust for your plan could solve this potential problem.)

• Risk of scams: There have been instances of funeral homes embezzling money from prepaid funeral plans and leaving the surviving family members holding the bag when they tried to file a claim.

How Much Do Prepaid Funeral Plans Cost?

You can expect a prepaid burial plan to cost $2,000-$10,000. If you opt to make monthly installments, expect to pay $125-$300 per month, depending on the total cost, age, and installment period. Similar to the cost of funerals in general, the cost of a funeral preplan is heavily influenced by your preferences, age, and region.

Below is a more detailed breakdown of the average cost of prepaid funerals depending on how you want to be remembered:

• Direct cremation (no funeral service): $2,000-$4,000

• Cremation with a funeral: $6,500-$8,500

• Direct burial (no funeral service): $3,500-$4,000

• Burial with a funeral: $8,000-$10,000

As you can see, what type of funeral you prefer will greatly influence how much your pre-paid funeral plan costs.

Single premium vs. monthly installments

There are two basic types of payment plans to consider for a prepaid funeral plan: Single premium and monthly installments. The single premium option requires you to immediately cut a check for the full amount of your funeral. By doing so, no further payments are needed. Or you can opt to make monthly installment payments over several years.

The typical installment periods are three, five, and ten years if you are 85 and below. This can be useful if cutting a check to cover the total amount isn’t feasible for you. If you opt for monthly payments, your total payments will most likely exceed the total cost of your prepaid plan due to interest rates and fees.

If you are over the age of 86, you will most likely only be given the option of a single premium.

Are prepaid funeral plans covered by Medicaid?

Prepaid funeral plans are not specifically covered by Medicaid. In fact, most Americans don’t have access to any Medicaid funeral assistance.

However, prepaid funeral plans can be useful in helping you qualify for your state’s Medicaid asset limits. If your prepaid plan is set up in a trust, those funds are not counted toward the total value of your personal assets measured when determining your Medicaid eligibility.

How To Pay For Your Plan

If you opt for the single premium options, your lump sum contribution will go into either a trust or a life insurance policy, both of which earn interest. The interest that accrues over time is why you are able to lock in rates now since it offsets the future cost of your funeral.

If you choose the monthly payment plan, your money will be paid to a life insurance company. In most cases, the funeral home will set you up with a pre-need funeral insurance plan.

A pre-need policy is actually a life insurance policy where the funeral home is the beneficiary. Note that you will not be allowed to make someone other than the funeral home as the beneficiary.

Funeral director J Scott Burke advises, “Under no circumstances should you ever make a payment directly to a funeral home. If your money goes to a life insurance company or a bank, there is no way your money can be embezzled.”

What is the contestability clause?

A contestability clause is present in every pre-need funeral insurance policy, and it grants the life insurance company the right to investigate the claim before paying out the benefit. Essentially, they want to make sure you answered the health questions accurately when you originally applied.

Applicable only to those who’ve opted to make monthly payments, the insurance company will order a copy of your medical records. If there is no evidence that you answered the questions improperly, they will pay the claim in full, including the full cost of your funeral.

If they find evidence of a health issue(s) that contradicts your answers on the health questionnaire, they will not pay the claim. Instead, they will simply refund the money you have paid thus far, and your family will have to find a way to pay for your funeral through some other means.

7 Steps To Planning A Prepaid Funeral

Taking the time to research, discuss, and plan ahead will allow you to ensure that your preferences are known and understood. Knowing where to start may be daunting, but we are here to help empower you to take control.

Follow these simple steps to establish a prepaid funeral plan for your future.

1. Research available options in your area:

   • Research different funeral homes or insurance companies to discover what their prepaid funeral plan options are. Consider factors like location, reputation, and available services.

   • Don’t feel pressured to choose the first plan you find. Get quotes from different funeral homes to compare options and pricing.

2. Schedule a consultation:

   • Contact one or more of the funeral homes on your preferred list to schedule a consultation with a funeral director.

3. Plan and customize:

   • Discuss your funeral wishes in detail during your consultation. This should include the type of funeral service (burial, cremation, etc.), the desired casket or urn, and any specific ceremony preferences.

   • The funeral director will present several plan options based on your needs and budget. You can customize most plans to include specific services, unique details, and preferred products or vendors.

4. Review and understand the costs:

   • Carefully review the plan details, including a breakdown of the covered items, any additional fees, the total cost, and cancellation policies. Now is also the time to ask questions about your payment options.

5. Finalize the agreement:

   • Once you’re comfortable with the plan details and costs, you’ll sign a pre-need funeral agreement, which serves as a legal contract outlining the specifics of your arrangements.

6. Funding the plan:

   • Depending on your chosen payment option, you’ll need to make the necessary arrangements to fund the plan. This could entail a lump sum payment, setting up monthly installments, or using a designated funeral trust account.

7. Keep copies and share information:

   • Save copies of the signed agreement and any plan documents for your records. Be sure to inform your family members about your prepaid funeral plan, including where you’ve stored the documents and the funeral home’s contact details.

Other Funeral Funding Options

If a prepaid funeral doesn’t sound like a good fit for you or your budget, there are other options you can pursue to ensure you take care of the financial aspect of your future funeral.

Funeral trust

You can elect to set up a funeral trust (often done with the help of an attorney) where the deposited funds are specifically earmarked for your funeral expenses. You can elect these trusts to either be revocable or irrevocable.

Payable on-demand accounts

A payable on-demand account (aka POD) is a special bank account set up through a traditional bank or credit union. The account holder designates beneficiaries to receive the funds in the account upon death. Sometimes also referred to as Totten trusts, you are free to deposit and/or withdraw funds from this account any time you please.

If you do not want to prearrange a funeral plan formally, a POD account is a great way to set aside funds for your funeral because it avoids probate. Your beneficiaries must simply provide evidence of the account holder’s death (usually via a death certificate), and the funds can be procured.

Potential downsides of a POD account include:

• If you have unpaid debts or taxes, the funds in your POD account may be vulnerable to claims by creditors and/or the government. In fact, the funeral home bill is legally ahead of the IRS in the line of creditors.

• If you live in a community property state, your surviving spouse has the right to half of the assets in your POD account. The only time that is not the case would be if the funds were acquired before the marriage.

Joint bank account

If a bank account has one owner and they die, the funds are unavailable until the estate is settled, which can take months. However, if two people are on the bank account and one passes away, the surviving account owner still has full access to the funds in the account.

Buying final expense insurance

Final expense insurance, commonly known as burial insurance or funeral insurance, is generally a whole life insurance policy with small death benefit options and little to no underwriting. It offers monthly payments ranging from $125-$300. Seniors, regardless of health, can qualify, and the benefits on these plans usually pay out within 24-48 hours.

Depending on your health upon sign-up, you may have to endure a full or partial waiting period before your benefits kick in. Some senior final expense insurance plans will cover you 100% on day one, but many burial insurance companies won’t pay out the full death benefit unless your policy has been in effect for two years.

The main difference between final expense life insurance and a prepaid funeral plan is the insurance policy will pay out a tax-free cash benefit directly to your beneficiary(s). The money is not paid to a funeral home unless you were to name them as the beneficiary.

There are never any restrictions on how the money is used, so it can be used for other expenses, such as unpaid debts if needed. And any leftover money stays with your loved ones to use as they see fit.

Existing life insurance

If you currently have a life insurance policy, the proceeds from it can certainly be used for your funeral costs. Double-check your account to see how much coverage you have to ensure it will provide enough payout to cover your desired services.

In addition, be sure to verify which type of life insurance it is. Some forms of life insurance expire after several years (called term life insurance). Another type of coverage operates as a pseudo-investment account (called universal life insurance), which may require large payments later in life.

No matter how you choose to do it, planning for your final expenses will help remove that burden from your loved ones. A prepaid funeral plan can become a gift of relief for both you and your family.

Plan Ahead For You and Your Loved Ones

Taking the time to plan your own funeral can be intimidating, but doing so can provide you and your loved ones some peace of mind. Doing the same for a loved one, whether it’s a parent, spouse, or any special person in your life, becomes a gift you can give them.

How To Pay For A Funeral + Arrangement Resources

Funerals cost an average of $9,995 in the U.S., which covers the viewing, service fees, and burial plot costs. The deceased, their estate, and their family are ultimately responsible for covering the costs, and these often unexpected expenses may leave loved ones wondering how to pay for a funeral.

KEY TAKEAWAYS

• The price tag for an average American funeral is $9,995 when you total the associated costs, such as funeral home services, burial plot, casket or urn, obituary, and more.

• Cremation costs average over $3,000 less than a casket burial.

• A final expense insurance plan, also known as burial insurance or funeral insurance, will cover end-of-life expenses.

• Other methods of paying for a funeral include prepaid funeral plans, using personal savings, taking out a loan, or putting the expenses on a credit card.

Discussing final arrangements with your family is a difficult conversation, but creating an end-of-life plan is important before your family has to pay for a funeral. Planning now can reduce the financial stress on your family in the future, especially considering that many funeral homes require upfront payment for services.

There are several payment methods and resources available to make funeral arrangements financially feasible. Explore your options for how to pay for a funeral and tips to reduce costs while planning your arrangements.

1. Determine Your Arrangements

Funeral costs vary depending on your burial arrangements, location, and more. Additional expenses like viewing refreshments and printed obituaries add up quickly, so determine your final wishes and begin budgeting for your funeral.

Generally, cremations are much more affordable than traditional funerals. You can reduce cremation costs by donating your body to science so the beneficiary pays for cremation. Alternatively, you may purchase a cremation plot in a cemetery, which will up the cost of your arrangements.

Home funerals are also a cost-effective option that’s legal in most states. This means you can celebrate the life of your loved one where they’re most comfortable and save on funeral home services.

There’s no right, one-size-fits-all answer, so explore your options, compare costs, and discuss them with your family to finalize your arrangements.

2. Get Burial Insurance Coverage

Final expense insurance is a type of whole life insurance that covers the cost of end-of-life expenses like funeral arrangements. It’s also commonly called funeral or burial insurance.

These policies finance burial costs with tax-free payouts to the deceased’s loved ones or their chosen funeral home. Families can then carry out last wishes without having to pay for a funeral themselves.

While burial insurance covers funeral arrangements, beneficiaries can technically spend it on anything, like paying off debt. This provides peace of mind for beneficiaries during a difficult time, and they can keep any remaining money they don’t apply to final expenses or estate costs.

3. Use Personal Savings

Personal savings accounts are a good place to start collecting funds for funeral expenses. Early saving allows contributions to compound with interest.

High-yield savings accounts are convenient liquid assets with annual percentage yields (APY) as high as 5%. Many banks offer high-yield savings accounts, so shop around and compare rates locally or online.

Payable on death accounts are another FDIC-insured savings option you can withdraw from as you need. A beneficiary automatically receives the funds at the time of death, so there’s no wait to cover expenses.

Experienced investors can also explore higher ROI opportunities like blue chip stocks or real estate. These are relatively secure investments over a long period of time, but they’re not very liquid if you need access to the cash quickly. It’s always wise to consult a financial advisor before investing.

4. Save Money By Shopping Around

Funeral home and service costs vary among providers and even by location. Contact multiple facilities to compare available services and their prices to find the best fit for your budget.

Some funeral homes may even offer payment plans once you book your arrangements with them.

5. Prepay Your Funeral Arrangements

You may have the option to prepay your funeral costs when you plan the arrangements in advance. Funeral service providers may allow you to pay it in full or over 3, 5, or 10-year periods if you’re under 85 years old.

Paying for a funeral in advance protects against inflation and cost between $2,000 and $10,000 in total. These payments work out to $125-$300 a month.

While prepaid funeral plans are convenient and help reduce the burden of a lump-sum payment, they’re often more costly than the prepaid plan itself in the long run.

6. Pay With A Personal Loan Or Credit

In a pinch, you can also use a personal loan or credit card to cover funeral costs. These options do charge interest, so you’ll ultimately overpay for your services, but it can make the expense more manageable with monthly payments.

Some lenders offer funeral loans with no interest for a set number of months. This is a great way to access extra cash with little wiggle room to repay the debt without collecting interest charges.

7. Set Aside Money For Funeral Expenses

There are also ways to set aside money in advance, specifically for funeral costs. Setting up one of these accounts can help ease the financial pressure on your loved ones when you pass.

• Funeral Trust: You can place funds in a funeral trust account that is managed by a funeral service provider or bank or trust company and specifically designated to cover funeral-related costs. While it ensures these expenses are pre-funded, it does not identify the arrangement wishes of the deceased, so it’s important to clarify your wishes elsewhere among your personal documents.

• POD Account (Payable upon death): A payable upon death (POD) account is a financial arrangement that allows you to designate a specific beneficiary to inherit the funds in the account upon your death. This type of account allows for the seamless transfer of assets without probate, providing a straightforward way to pass on financial assets to your chosen beneficiary.

8. Explore Resources To Pay For A Funeral Without Money

Funerals are expensive and an unexpected expense in many cases. Several federal, nonprofit, and local organizations provide resources for families to pay for a funeral and reduce their financial burdens during difficult circumstances.

Here are some resources to connect with if you’re trying to pay for a funeral without money:

• Veterans Benefits: veterans and surviving spouses may qualify for a free burial

• Social Security Survivors: surviving spouses and dependents of Social Security benefits may receive a $225 lump sum in death benefits and monthly benefits

• Employer Survivor Benefits: surviving spouses of federal and civil service retirees may qualify to receive up to 55% of the retiree’s monthly benefits

• FEMA Disaster Relief: select funeral expenses for loved ones lost in a major disaster or emergency may be covered by the Federal Emergency Management Administration (FEMA)

• Victim’s Assistance: State Crime Victims Compensation Programs may provide financial assistance for crime victim’s medical or burial costs, and other related expenses

• Call 211: a helpline for community services that can connect you with local organizations and assistance

• Crowdfunding: a fundraising method that relies on small donations from a large pool of donors via sites like GoFundMe

Get Peace Of Mind With Funeral Insurance

The financial burden of paying for a funeral is hard enough, but grief and a complicated legal process can compound it. Funeral insurance guarantees that your funeral providers meet your final wishes and your family can grieve without worrying about thousands of dollars in burial bills.

Best Life & Final Expense Insurance With No Waiting Period

No waiting period life and burial insurance coverage insures you 100% for natural or accidental death as soon as you make your first payment. In other words, you do not have to wait two years before the policy will pay out the full death benefit.

KEY TAKEAWAYS

• You don’t have to take a medical exam to qualify for immediate coverage, but you must complete a health questionnaire.

• All life insurance policies with no health questions (guaranteed acceptance) have a 2-year waiting period.

• Most health issues are insurable and can qualify for no waiting period coverage.

• Most companies that sell final expense life insurance with no waiting period only offer this type of coverage through licensed agents rather than selling it online or through the mail.

How Does Burial Insurance With No Waiting Period Work?

Any type of life insurance with no waiting period will pay out the entire death benefit, even if death occurs during the first two years.

The cause of death can be natural or accidental, and your beneficiaries will still receive the full death benefit.

Tip:

You needn’t necessarily be in good health to qualify for an immediate coverage plan. Many life insurance companies offer this type of policy to people with a wide variety of pre-existing medical conditions.

Most people can qualify for a “first-day coverage” plan that doesn’t insure them only for accidental death.

It’s usually just a matter of searching until you find a life insurance company(s) that will accept all your health conditions and approve you for immediate coverage.

How To Qualify For No Waiting Period Final Expense Coverage

To qualify for life or final expense insurance with no waiting period, you must apply with a company where you answer health questions and are subsequently approved.

You don’t have to undergo a medical exam but must answer questions about your medical history.

Remember that all life insurance plans with no health questions will always have a two-year waiting period for natural causes of death.

What Is A Partial Life Insurance Waiting Period?

Commonly referred to as a “graded plan” by most companies, a partial waiting period means that only a portion of the death benefit will pay out during the first two years.

It’s common for partial plans to have a payout that is 30%-40% during the first 12 months. Then, during months 13-24, the payout is typically 50%-75%.

Like a full no waiting period burial insurance policy, partial coverage options still require you to answer health questions to qualify (there is never a medical exam).

The precise payout amounts vary based on the company.

Some people may not be eligible for an immediate benefit type of life insurance but could qualify for a partial plan.

Best No Waiting Period Burial Insurance Companies

Best for lowest cost: Mutual of Omaha

Best for the elderly seniors: Aetna

Best for younger adults: Aflac

Best for those with low-grade cancers: AIG

Best for tobacco users: American Amicable

Best for multiple health conditions: Royal Neighbors of America

Health Issues Where You Will 100% Have A Waiting Period

Unfortunately, some medical conditions are such a high risk that no insurer will offer immediate or partial coverage.

If you have any of these conditions in your medical history, you will have a two-year waiting period, no matter what you do.

• AIDS or HIV

• Alzheimer’s or dementia

• Currently in a hospital, nursing home, or skilled nursing facility

• Actively have or are being treated for cancer (excluding certain stage 0-1 cancers)

• Hospice care

• Home health care

• Alcohol or drug abuse (or treatment for either) within the last 24 months

• Terminal illness

• Wheelchair usage due to an illness or disease

There may be other conditions, but this is the majority of them.

As you read that list, you’ll notice that many chronic illnesses are not listed. As stated earlier in this article, most conditions are insurable.

It’s well worth consulting with an experienced licensed agent who can determine if you’re eligible for first-day or partial coverage.

How Do Guaranteed Acceptance Life Insurance Policies Work?

As the name suggests, a guaranteed issue life insurance policy assures that everyone is approved regardless of their health or lifestyle history.

The application process does not require you to take an exam or answer questions.

It’s critically important to understand that all guaranteed acceptance policies have a mandatory two-year waiting period for natural causes of death.

If the policyholder dies within the first two years (except for accidental death), the insurer will only refund the premium payments.

All guaranteed acceptance plans are whole life insurance, which means the coverage lasts forever, and the premiums remain the same. Presently, guaranteed issue term life insurance does not exist with any company.

Is There Guaranteed Acceptance With No Waiting Period?

There is no such thing as a life insurance policy with no health questions and no waiting period.

All guaranteed issue life policies have a two-year waiting period.

Sadly, some companies will lie and make it seem like you can get a policy with no questions and no waiting period.

Tip: Companies that advertise guaranteed acceptance life insurance with no waiting period only do so because they get paid a fee when you click on their website. They don’t care if they have to lie to get you to click. All they care about is collecting their fee.

If there were a policy that had no underwriting and covered you immediately, every terminally ill person would buy it.

The insurance company would be out of business within months.

Burial Insurance Vs. Life Insurance

Burial insurance is a marketing expression that refers to a particular type of whole life insurance policy intended to cover funeral costs.

It’s a special type of permanent life insurance designed for seniors with pre-existing conditions that otherwise wouldn’t qualify for traditional life insurance coverages.

Tip:

Burial insurance is also known as “funeral insurance “and “final expense insurance.” A funeral only happens when a life ends, which is why this type of policy is still a form of life insurance.

Burial expense policies for seniors are very different from traditional life insurance products because they will accept applicants with many health issues, you can buy a small amount of coverage, and the claim payout time is quick.

When you die, the insurance company will pay the money (tax-free) directly to your loved ones or funeral home to pay for funeral expenses, cremation expenses, medical bills, or anything else.

No Exam Vs. No Health Questions

No exam life insurance policies are not the same as ones with no health questions.

Life insurance ads that only say “no medical exam to qualify” are not guaranteed acceptance.

To set the record straight:

• No medical exam life insurance: A simplified issue policy that does not require you to undergo an exam to give a blood and urine sample. You will still have to answer health questions, which determines your eligibility. These types of policies typically have no waiting period if you’re approved.

• No health questions: A guaranteed acceptance policy that does not require you to answer any questions about your health or take an exam. The plans always have a two-year waiting period.

Given the prevalence of deceptive life insurance marketing (such as the Colonial Penn $9.95 plan), it’s understandable how shoppers confuse these two terms.

Tips For Getting Full First-Day Coverage

You can take some practical steps to give yourself the best chance at finding a life insurance plan that covers you in the first two years.

The goal is to find an insurance company that has underwriting accepting of all your health issues.

The best way to find said insurer(s) is to work with an independent insurance broker.

That gives them the freedom to compare dozens of policies on your behalf. They will look at the underwriting of each one to determine if any will approve you for immediate coverage.

If you deal with a captive agent (who represents only one insurer), they cannot investigate multiple companies on your behalf. If their company doesn’t approve you, they have no recourse.

The same is true when dealing directly with an insurer such as Colonial Penn, TruStage, or Globe Life.

If they don’t approve you (which all three of those companies rarely do), they certainly will not try to find you another insurer that will.

Tip:

Working with an independent life insurance agent doesn’t cost you anything. Also, the insurance isn’t more expensive because you used a “middleman.” Brokers get paid by insurance companies, so their services come at no charge to you.

If you’ve had difficulty finding burial life insurance with no waiting period, call us at 1-800-644-2926.

We’ve helped thousands of customers secure first-day coverage when they thought it was impossible otherwise.

You can check out our past customer reviews if you want to learn more about us.

Eligibility For Each Medical Condition

The table below lists various health issues and whether or not they are eligible for no waiting period life insurance.

Please remember that final eligibility is based on age, state, and complete health history.

How Does The “Contestability Clause” Work?

Life insurance policies that provide full or partial coverage during the first two years will always contain the incontestability clause.

The incontestability clause grants the insurer the right to investigate death claims within the first two years (it’s one year in some states).

Before paying the claim to your beneficiaries, the insurance company will order all your medical records.

Their goal is to determine if the applicant truthfully answered the health questions when they applied.

Tip:

All insurance companies in the USA include this provision. It’s impossible to avoid this clause in a life insurance contract. Some companies use deceptive marketing to make you think this provision doesn’t exist, but it does. For example, Lincoln Heritage advertisements frequently proclaim, “Approved claims paid in 24 hours.” That little word “approved” is the part most people miss. Lincoln Heritage Funeral Advantage death claims (or any other company) within the first two years will only be “approved” after they exercise the incontestability clause.

If your medical records showed that you had a declinable condition when you applied, they would not pay your claim. Instead, they will void the policy and refund your premiums.

Alternatively, they will pay the full death benefit if your medical records confirm that you didn’t have any declinable conditions when you applied.

It’s important to remember that the insurance company is not concerned about your health issues after the policy is issued.

All they are worried about is your health history before you apply. Your health conditions after the policy was issued are irrelevant.

Truthfully, contestable claims are rare, and most result in a total payout.

However, there are some claim denials because the insurance company found that the applicant rightfully didn’t qualify in the first place due to a misrepresentation of their health.

Check out this example contestability clause from an actual policy to see how it reads.

Remember that you can get no waiting period burial insurance, but it will still contain the contestability clause.

How To Plan Your Own Funeral: 10-Step Guide + Checklist

Planning your own funeral is an incredible act of love. If you don’t design and document your final wishes, your family will have to do so while mourning your death.

KEY TAKEAWAYS

• Planning your own funeral takes the guesswork out of loved ones who will handle the tasks in your absence.

• There are many factors and details of the funeral planning process, primarily the method of burial, type of service, associated costs, and having a will in place to honor your wishes.

• Funeral costs — including viewing, service, burial, and burial vault — can range from $2,000 to $10,000, with the national average being $9,995.

• Prepaid burial plans and final expense insurance can help cover funeral costs and other unforeseen expenses that would otherwise become debt for surviving loved ones.

Planning your own funeral and memorial service probably isn’t your idea of a fun way to spend a weekend. Most people don’t do it, leaving the deceased’s closest surviving family members to handle these morbid tasks.

The usual way of doing things makes sense when someone young dies suddenly and unexpectedly. But one of the only things worse for your survivors than losing you is having to decide what to do with your body, how to honor your life, and how to pay for it—during some of the most difficult moments in their lives.

It takes courage to confront your death, so we commend you if you’re thinking about making your own final arrangements. Most importantly, your loved ones may be relieved to know that they’re carrying out your wishes and not guessing what you would have wanted.

Read on to learn everything you need to plan, or skip ahead to the complete checklist.

1. Choose A Funeral Home Or Mortuary

One of the first things your family will have to decide if you don’t make your own final arrangements is who should pick up your body.

It’s an important decision because, once a particular funeral home or mortuary picks up your body from your place of death, there’s often a hefty fee to transfer it. That means that your survivors may be locked into that company’s facilities, services, and pricing.

You’ll want to see what’s available in your area, whether they offer all the services you and your loved ones are likely to want, and what different facilities charge. You may want to pick a first, second, and third choice in case places go out of business, change significantly, or are unavailable at the time of your death.

2. Decide On Burial, Cremation, Or Both

You have quite a few options for what happens to your body after you die—perhaps more than you realize. Ask yourself the following questions:

• Do you want to be buried or cremated immediately (direct burial or direct cremation), or should there be a funeral first?

• If you want a funeral, do you want your body to be placed in a casket?

  • If so, do you want your body to be embalmed (preserved)? You’ll need to choose this option if you want an open-casket funeral. It’s optional if you want a closed casket.

• Do you want an open-casket or closed-casket funeral?

• Do you want to be buried or cremated?

• If you want to be buried:

  • Should it be a traditional burial in a vault or a natural burial?

• If you want to be cremated:

  • Should it happen before or after the funeral?

  • Which cremation process would you prefer, such as traditional flame cremation or alkaline hydrolysis (water cremation)?

  • Do you want your cremated remains to be buried, scattered, kept in an urn at home with your loved ones, or some combination of those options?

All of these choices have different prices and environmental impacts.

The cost of cremation compared to the price of a traditional burial, along with religious beliefs and cultural traditions, usually guide people’s decisions about burial vs. cremation.

Consider registering as an organ donor

Registering as an organ donor in your state may allow you to do one last good deed. You could save the lives of up to eight people and improve the lives of another 75 by donating your organs. That’s a pretty incredible way to leave a legacy.

Your choice to donate your organs could restore someone’s sight, help a burn victim, or get someone off dialysis, to name just a few positive outcomes. But it’s important to tell your family about your decision so they won’t be caught off guard and can help ensure your wishes are carried out. Remember, every minute counts in saving organs after death.

Your doctors will still do everything possible to save your life. Also, organ donation usually won’t prevent your family from having an open-casket funeral.

Consider donating your body to science

If you aren’t an organ donor, another option for helping others is to donate your body to science. Your anatomical gift can help train students and professionals in surgical procedures, health education, mortuary science, and medical device development.

To donate your body to science, it’s a good idea to choose your recipient organization and register in advance because some programs only accept pre-registered donations.

You’ll usually need to choose a place within 150 miles of your home. Examples of businesses that accept anatomical gifts include:

• Mayo Clinic

• Northern Michigan University Center for Forensic Anthropology

• Stanford Medicine

• University of Arizona College of Medicine Tucson

• University of California

• University of Michigan Medical School

• University of Minnesota Medical School

• Western Carolina Forensic Osteology Research Station

Recipient organizations for body donation exist throughout the United States.

You’ll also want to talk with your family about your wishes since some organizations will not accept body donations against a family’s wishes, even if you’ve registered with that program.

While your family can still mourn your loss with a funeral or memorial service, they may not have possession of your body, meaning an open-casket funeral may not be an option. The recipient may cremate your remains after use but may not be able to return the cremains to your family. Policies vary by program.

Body donation not only helps others but can save your family from the expense of burial or cremation. Also, some anatomical gift programs hold annual memorial services for their donors’ families and friends. It can be an excellent way to connect with others who are grieving, and whose loved ones made the same choice.

You’ll need to make alternate arrangements if your body isn’t eligible for donation when you die. Possible reasons why your anatomical gift could be rejected include not being close enough to a facility that can accept your body, dying with an infectious disease, dying of sepsis, dying in an accident, or exceeding a certain weight.

3. Select The Type of Funeral Service

How do you want your friends and family to come together to mourn you? What type of funeral service do you prefer? Who would you like to be there? Planning an end-of-life event is a lot like planning a wedding, except it’s often done at the last minute, and, of course, the vibe is less upbeat.

Consider the tone of the event you’d like people to honor you, what fits your personality, and what would be most helpful to those you will leave behind.

Here are a few more things to think about when choosing a service type.

Funeral vs. celebration of life

A funeral is a traditional, formal, structured event that often includes religious and cultural rituals. It’s usually held at a funeral home, where the deceased’s body is usually present and placed front and center in a coffin or urn, along with opulent floral arrangements like standing sprays and wreaths.

At a funeral, religious leader or funeral director leads the service, which typically includes a eulogy. It may also include music and prayers, Bible verses, or poems. Also, attendees often wear black.

A celebration of life, on the other hand, is a modern event that may not include religious or cultural elements. It isn’t held at a funeral home, but rather at a more casual and upbeat location. The deceased’s body usually is not present, and there is little to no structure to the event.

The celebration of life gathering may include a slideshow and allow attendees to share their favorite stories about their deceased friend or relative. People usually dress casually and may wear something that honors the deceased, like their favorite color.

Memorial service vs. celebration of life

A memorial service is a more traditional way of communing with others who want to support each other and remember their friend or family member. It often comes right after a funeral or burial service and tends to be a more somber occasion.

A celebration of life is a more modern way of dealing with someone’s passing. It tends to reflect more on the positive ways the deceased impacted others and less on a sad event.

It might be held several weeks or months after the death when feelings of grief may be less intense. It might be a simple gathering at a park, someone’s house, or a restaurant with less planning and expense.

A celebration of life can also be a good choice if it’s possible that family and friends from out of town won’t be able to gather on short notice for a funeral or memorial.

You don’t have to choose only a memorial or only a celebration of life. Each event can serve a different purpose. Your loved ones might want to do both.

You can always plan more than one event and leave it up to your survivors what they want to do when the time comes.

4. Plan Out Your Funeral Service Details

If you’re going to have a funeral, where should it be held? The most common options are a funeral home or a house of worship, but it can even be held at someone’s home.

Funerals usually follow certain rituals. If you’ve served in the military or been a member of a fraternal society, cultural organization, or religious group, you might choose to use their rituals — which often means they’ll send people to carry out your funeral service.

In fact, if you’re a veteran, you may be eligible for benefits that can help pay for your final expenses.

It’s also possible that you don’t want a funeral held in your honor. There’s nothing wrong with that. But let your loved ones know so they don’t have to plan or pay for something you didn’t even want. Here are a few more decisions you’ll want to make.

Create a guest list

The important people in your life may change between now and your death. However, it’s worth creating a list now of everyone you would want to be informed of your death.

It will help your survivors know whom to notify and give everyone who cared about you a chance to attend your funeral.

Select the attire

What do you want people to wear? All black? Formalwear? Bright colors? Your favorite sports team’s gear? Anything they want?

Sometimes, people aren’t sure what to wear to a funeral, memorial, or celebration of life. If they know what you would have preferred, it can help them choose an outfit that they feel will honor you appropriately.

Choose the foods and drinks

Some people won’t have much appetite after you die. Others will be starving after sitting through a service. Either way, no event is complete without food and drinks, so think about what you’d like to be served.

Your hosts could serve appetizers, lunch, dessert, or all three. If you have a favorite cuisine, restaurant, or family recipe, start there. Maybe you’d like everyone to enjoy your favorite chocolate chip cookies and coffee or street tacos and beer.

Speaking of beer, consider whether you want alcohol served at this event. If you have friends or relatives who behave poorly after drinking, you might want to skip it.

Select flowers and other decor

You might want to choose specific types of flowers that are traditionally used in funerals or have particular meanings. Examples include cut lilies, peace lily plants, roses, and carnations.

You might want to choose your favorite flowers. It may be challenging to select a specific florist or exact arrangements, but you can at least give your loved ones an idea of what you’d like.

Some people also like to have a table at the funeral parlor or memorial service entrance displaying meaningful objects like trip mementos, collectibles, or sports memorabilia.

Survivors often like attendees to sign a guest book and perhaps leave a condolence message or write down a special memory on a card or in the guest book.

Make a playlist

This step is optional, but some people like the idea of having their favorite songs played at their memorial service or celebration of life. If that sounds like you, make a playlist of meaningful songs.

It might be best to make it a written list that you email to loved ones because any music service you use may not be accessible after you pass.

Choose your favorite photos

Many people display oversized photos of the deceased on easels at remembrance services. Obituaries often include photographs, too. And it’s become common to play a slideshow of the deceased showing the important people and occasions in their life.

Putting together a folder of your favorite high-resolution photos can make these tasks easier for your loved ones — and make sure your legacy isn’t a grainy photo you dislike.

Identify helpers

Family and friends alone can’t handle all the tasks involved in the various ceremonies and commemorations that follow a person’s death.

They have too many logistical details to deal with, like getting death certificates and closing accounts. They’re going through one of the worst emotional experiences of their lives and may not be eating or sleeping well.

Perhaps most importantly, they want to be present at each event so they can process their emotions, take in the experience, and interact with guests. It will be a big help if you identify church or synagogue members, neighbors, or businesses who can help set up tables and serve food.

Optional graveside service

Instead of or in addition to a funeral, you might want to have a graveside service if your body or cremated remains will be buried.

Some choices you should think about here include:

• whether you want your body transported in a hearse

• whether you want a funeral procession

• who should conduct the ceremony

• whether you’d like to have attendees place flowers in your grave

• how the weather might impact your wishes

5. Select Your Casket Or Urn

Picking out a casket or urn can be fraught with emotion for your survivors and result in them spending more money than you would have liked. While you might be okay with being buried in a wholesale-priced casket from Costco, your loved ones might feel it’s disrespectful to order your coffin online or try to get a good deal on this purchase.

They also might not know — funeral homes are required by law to tell them — that they don’t have to purchase your casket or urn from the funeral home, where the price may be marked up to double what you would pay by shopping around and making an outside purchase.

So go ahead: order your urn from Amazon, so your loved ones don’t have to wonder whether they’re choosing something you would have approved of. (Some options are surprisingly high quality and affordable; you can even get them engraved.)

Choose a cemetery or mausoleum

Some people want to be laid to rest in a particular cemetery or mausoleum where other family members have been placed. Other people may not know.

Here are some things to consider when choosing a cemetery or mausoleum:

• Location. If your survivors will want to visit your grave, think about places that would be convenient and peaceful for them to visit.

• Cost. Plots in some cemeteries (and vaults in some mausoleums) are more expensive than others. The specific location you choose may also affect the price. For example, a cemetery plot beneath a large shade tree may command a premium price.

• Ownership. Is the cemetery or mausoleum privately or publicly owned? There can be advantages and disadvantages to both.

• Security. Is the property well-protected and located in a safe area? Unfortunately, some people will vandalize headstones and rob graves if they think they can get away with it.

• Financial stability. Research whether the cemetery has had any financial problems and find out how they provide for the care of the grounds and headstones. Some cemeteries have an endowment fund that provides for ongoing maintenance. Endowments don’t always have as much money as they should, though, and they can be mismanaged. With or without an endowment, a place with financial troubles may cut corners and neglect the maintenance they’re supposed to perform.

IMPORTANT: Under the Federal Trade Commission’s funeral rule, funeral homes and cemeteries must provide you with a price list upon request. Many places publish their price lists online, so you don’t even have to ask — but make sure you’re looking at the current year’s prices.

Expect nothing less than full-price transparency from any establishment you consider making your final arrangements with. It’s the law.

6. Select A Burial Plot — Or Don’t

Preselecting and prepaying for a cemetery plot might seem like a good idea, especially if you want to be buried alongside other family members. Before going this route, you should research the widespread fraud related to these purchases.

Burial plots are double-sold more often than you might think. Many families have prepared to enter their loved ones in a prepaid plot, only to find that another body was already there.

It might be a better idea just to let your loved ones know what kind of burial plot you’d like — under a tree, with a nice view, that sort of thing.

Choose a headstone, gravestone, or grave marker

Decide how to mark your future burial plot. Your headstone, gravestone, or grave marker can be flat or upright, made of metal (bronze) or stone (granite). You can also decide what photo, epitaph, or other text should appear on it.

Keep it simple and classic, or get inspired by these funny headstones.

Like urns and caskets, you can shop around for these items. You don’t have to buy them directly from a cemetery or funeral home. Finding your own provider can save a lot of money.

Pick out your final outfit and accessories

Whether you’re going to have an open or closed-casket funeral, be buried or cremated, you might want to choose what you’ll wear. Some people prefer a dress or suit, while others choose a favorite sports jersey.

You might also want to place memorable items in your casket that your loved ones would be okay with not inheriting, like a less-valuable item from your favorite collection, a copy of your favorite book, or a wedding photo.

Certain items are too hazardous to bury or cremate, so keep that in mind when making your selections.

7. Write Your Own Obituary

How do you want to be remembered? Your obituary will be read by people who knew you and by future generations.

Publishing an obituary in the newspaper is optional, of course. But if you want one, you can write it yourself to ensure it includes everything important.

The longer your obituary, the more it will cost to publish—in print, at least. So you may want to get an idea of typical lengths and prices for your local paper and include that cost in your final expense planning because it could be several hundred dollars.

8. Share Your Final Wishes With Your Loved Ones

Talk through your choices with the people who are most likely to be in charge of carrying out your final wishes. If your children don’t favor embalming and burial, but that’s what you want, have a conversation with them about why it’s important to you.

If you haven’t already, you should have similar conversations about your will and your medical power of attorney or advance directive.

Discuss who should receive your most important possessions and assets and why you’ve made those choices. Explain what kind of lifesaving care you want.

If you explain your choices beforehand, you may prevent confusion, hurt feelings, and conflicts that would otherwise occur in your final days and after your death.

It’s also helpful to make sure your loved ones know in advance what to do when someone dies and what advance arrangements you’d made and paid for.

9. Put Your Last Wishes In Writing

All the advance planning you do won’t help unless your loved ones know about it and agree to follow your wishes. Everything you want and arrange needs to be in writing, stored in multiple places, and distributed to people you trust.

Don’t rely on just telling one person what you want. Depending on how much time passes between your planning and your death and their physical and mental state when you die, they may not remember what you said or be unable to fulfill your wishes.

Along with writing everything down or typing everything up, you may want to keep a copy on a shared cloud service, email your plans to multiple people, or use an online planning service.

Keep the possibilities of loss, destruction, technological failure, and services going out of business in mind. Also, make sure you backup your wishes in different places that won’t all be vulnerable to the same type of loss.

10. Estimate Your Final Expenses

Now that you know what you want, it’s time to figure out how much it will cost. Use our funeral cost calculator to estimate your final expenses and determine your insurance needs. Our calculator uses national median prices, but you might want to change the numbers based on what you’ve found in your research.

If you have no reason to think your death is imminent, you might want to bump up your estimate by 3% per year for the number of years you think you might live. Inflation will likely mean that future final expenses cost more than they do today — which is one reason people buy pre-paid funeral plans.

Once you’ve planned out your entire funeral and costs, the next step is putting together a plan to make sure your final expenses don’t fall on your family.

You have four basic options to pay for your final expenses.

Permanent Life Insurance

Permanent life insurance, unlike term life insurance, doesn’t expire when you reach a certain age. It guarantees that your loved ones will get money when you die.

Life insurance to pay for burial expenses is a popular option, mainly because it provides immediate protection as soon as you pay for your policy (most of the time).

There are even policies that were designed specifically to cover end-of-life costs. They are often referred to as “burial insurance for seniors” or “final expense life insurance.”

They are small policies that provide just enough coverage to pay for final expenses. These policies are particularly helpful for folks over age 80 who likely can’t qualify for a traditional life insurance policy because of their health.

The cost of burial policies is generally affordable, too, since the face amounts are low.

Savings account

With this option, you save a set amount every month until you have enough to cover all your final expenses.

You should only plan to use a savings account to cover your final expenses if you are very financially disciplined and have enough income or assets to do four things:

• Save up enough money to cover your final expenses.

• Put the money in a high-interest savings account or certificate of deposit to help it keep up with inflation.

• Leave the money alone, no matter what other financial need arises

• Name primary and contingent beneficiaries by filling out a form with your bank. That lets your heirs quickly and easily receive the money when you die.

The obvious drawback to this option is that if you pass away before you’ve saved enough — or if you have to spend down your assets to qualify for Medicaid — your family will have to come up with the difference.

Prepaid burial plan

A prepaid burial contract is an arrangement between you and a specific funeral home. Basically, you completely design your funeral service with them, and they tell you how much it will cost.

You can pay the entire cost upfront or make a series of monthly payments. The older you are, the less time the funeral home will give you to pay for your contract. Payments typically end up costing $100 to $500 per month.

The contract is backed by a form of life insurance. However, it’s different from an individual policy you’d buy directly from a life insurance company. The policy will only pay out to the funeral home when you die.

On an individual policy, you could choose specific individuals, like your children or spouse, to receive the death benefit. They could then use the money however they wanted — which has its pluses and minuses.

Funds from the deceased estate

Although not recommended, you could rely on your family liquidating your house, investments, or other valuable property to pay for your final expenses. The advantage of this is possibly earning a tax deduction for covering the funeral expenses.

For several other reasons, however, this isn’t the best option. It should be a last resort.

It will take a lot of time for your family to liquidate your estate. In the short term, your family will have to come up with the money to cover your final expenses — which might mean taking on high-interest debt.

First, your assets must go through probate, which can easily take months. Selling your assets can take even longer. It’s not always easy to sell a house, for example. Plus, you might want to leave your valuable assets to your heirs instead of having them sold off.