Funeral and burial fees may be as much as $15,000. If you want to avoid your loved ones being burdened with funeral and burial costs when you’ve passed on, then you will need a plan. Here’s a quick cheat sheet on how to protect your family from end-of-life expenses.

Will funeral homes take life insurance?

Yes. Many funeral homes will work closely with families and normally perform their services and wait to receive payment from the family once they receive the death benefit.

There is a product called funeral insurance in which funds are set aside and paid directly to your funeral home of choice, but we recommend instead to purchase a form of life insurance that distributes benefits to your loved ones and they can use these funds for whatever they want, including funeral expenses.

» Compare: Term life insurance quotes

What types of life insurance can provide coverage for funeral and burial costs?

Any type of life insurance you purchase can provide death benefits for a funeral as long as you die while it’s inforce—or active. Final expense life insurance (a small guaranteed whole life insurance policy sometimes confused with funeral insurance), permanent life insurance, or a term life insurance policy can provide funds to pay for end-of-life costs.

How much insurance should I buy to cover funeral costs?

The average funeral and burial cost about $9,000 in 2017, not including the usual additional expenses such as flowers, the grave marker (or tombstone), and obituaries. Your policy should at a minimum cover these expenses with an allowance for inflation over time.

How can I tell if I really need life insurance for my funeral?

If you already have life insurance in place, have any changes occurred in your life since you purchased it? Did you buy a house? Open a business? Have children? If so, you may want to consider purchasing an additional term life insurance policy to provide more financial protection to your loved ones.

If you don’t have life insurance, how will your family pay for your final expenses such as your funeral or any debt you leave behind?

Simply put if your loved ones will be financially burdened at your passing, then you need life insurance.

» Calculate: Life insurance needs calculator

Term Life Insurance, Permanent Life Insurance, and Final Expense Life Insurance: How to Make the Right Coverage Choices

Since funeral and burial costs can be significant it is important to have the facts when choosing between purchasing a new term life policy, permanent life insurance policy, or final expense life insurance policy.

How much will my funeral really cost?

According to the Bureau of Labor Statistics, the cost of funerals and burials has risen by more than 220% in the past 30 years—rising twice as fast as any other consumer item and service.

That means it is very likely that the costs of funerals will rise significantly in the future as well. As we learned above, although the average funeral may cost around $9,000 in 2018, there are many extra costs to factor in when estimating end-of-life costs.

The Funeral Site, a funeral resource website, lists some of the additional expenses that your loved ones may incur in addition to the costs of the funeral and burial.

Should I purchase a new term life policy?

Term life insurance is the most affordable type of life insurance. It’s common to own more than one policy as well. This strategy is called laddering.

Oftentimes, people will buy a small term policy when they are young ($100,000 to $250,000 in coverage) at a nominal cost, but then their lives change—they get married, buy a house, have children. These changes may bring the need for more life insurance coverage.

If you currently already own life insurance, does your term life policy’s death benefit provide funds sufficient to:

  • Replace lost income if you are a key provider in your household?
  • Repay consumer debt that is not dischargeable upon your death?
  • Pay off the remainder of your mortgage (if you wish your spouse or partner to own your home outright)?
  • Contribute towards your spouse or partner’s retirement fund?
  • Leave funds earmarked to help adult children buy their first home or pay off student debt?

Of course, you may have other financial priorities in addition to the ones above. These are just a few questions to which, if the answer is “No”, we advise purchasing additional life insurance.

Although having some insurance is better than none, with today’s various insurance options there is no reason to be underinsured.

You can always use our free life insurance needs calculator to find out how much term life coverage makes since for your family.

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