Pay for a Funeral With Life Insurance

How to pay for a funeral is unlikely to be on anyone’s list of financial chores to check off.
But when that unfortunate time comes, having the money to pay for it can allow your family to focus on grieving.
Instead of going into debt or trying to figure out how you’re going to come up with the median cost of a full funeral with burial of $7,640, according to the National Funeral Director’s Association, there are easier ways to pay.
One way is with a life insurance policy for the person who died.

How Life Insurance Pays

A death benefit is paid to beneficiaries of a life insurance policy after the policyholder dies. An important component of this is that the life insurance policy must be active, meaning payments have been made on time and haven’t lapsed.
The death benefit payout can be used to cover funeral costs, though the beneficiaries can spend the money however they wish.
A term or whole life policy can be used to pay for a funeral.
The money is paid after the insurance claim is approved. This can take a week to a month for a regular policy. It can take up to 60 days if the insurer needs to investigate the claim, such as if the policy has only been active for a year or two.
Funerals are usually held sooner than insurance payouts are made, so the money may be needed in a week instead of a month. To get quicker payment, the next option may be best.

Final Expense Insurance

Also known as burial insurance, a permanent policy called final expense insurance can be paid to beneficiaries in as soon as a day or up to seven days after the claim information is verified.
The policy is designed to cover end-of-life expenses such as funeral costs and unpaid medical bills. People over age 65 are usually the target of this type of insurance, and coverage can be issued up to age 85.
The payment amount ranges from $5,000 to $25,000. A medical exam isn’t required to get coverage.
Final expense insurance can be a good alternative if you don’t have enough savings to cover the cost of a funeral. It’s also beneficial to people in poor health or terminal illnesses who don’t qualify for a traditional life insurance policy.
The policy must remain active to be paid out at death. It’s a permanent policy where the premiums are paid for the insured’s entire life, so missing a payment could lead to the coverage no longer being valid.

Buy Insurance From A Funeral Home

A third option is preneed insurance from a funeral home as a way to prepay for a funeral. Coverage is capped at $25,000 and buyers can arrange as much or as little of their funeral as they’d like.
A big drawback is that the coverage is tied to a specific funeral home. This makes it important to check a funeral home’s financial stability and to see if your coverage can be transferred if you move out of the area.
The policy should specify “guaranteed service.” Without it, your family may have to pay the difference between the value of the policy and how much the funeral home charges.

What If There’s A Gap?

If the life insurance policy doesn’t pay enough to cover a funeral bill, then the deceased’s loved ones will have to fill the gap. There may also be a gap if they decide to use some of the payout for other debts.
Remember that final expense insurance is paid quickly to beneficiaries, who don’t have to use the money to pay for a funeral. Though it’s meant to cover end-of-life costs, your survivors could use the money any way they see fit.

Other Burial Options

To save money, they can choose cremation over a full-service burial, have a public instead of a private ceremony, and not add expenses to a funeral.
If the survivors are still struggling to pay for a funeral, they might ask for help from the deceased’s employer or union. Surviving spouses of Social Security recipients can get a lump sum payment of $225 to help pay for a funeral.
Eligible veterans can be buried in a national cemetery and the Veterans Administration will cover the cost of the plot, headstone, vault and internment. Additional benefits are available if the veteran died during active duty or from service-related injuries.
If your family doesn’t mind going into debt, another way to pay for a funeral is to apply for a loan through a bank, credit union or online lender. Some funeral homes also offer loans.
Be sure to shop for the best loan rate and consider if it’s worthwhile going into debt to pay for a funeral.

Reclaim Up to $610/Year in Car Insurance

Here’s the thing: your current car insurance company is probably overcharging you. But, who has the time to look around for around a new company?

A website called makes it super easy to see if you’re getting the lowest price. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using, people have saved up to $610 a year.

It takes just a few minutes to see how much could put back in your pocket. And the best part? Because we’re driving less, some insurers are slashing prices this month.

Share this article

Millennials: You really do need insurance. Here’s why.
July 19, 2021
Millennials: You really do need insurance. Here’s why.
Chubbs Life Insurance Review – Life Insurance (and Anything Else You Can Think Of)
June 29, 2021
Chubbs Life Insurance Review – Life Insurance (and Anything Else You Can Think Of)
Phoenix Life Review – Lesser Known for Insurance But Has History on Its Side
April 22, 2021
Phoenix Life Review – Lesser Known for Insurance But Has History on Its Side
How Much Life Insurance Do You Need? (And You Do Need It)
April 10, 2021
How Much Life Insurance Do You Need? (And You Do Need It)
Start Making Money Moves