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Life insurance for final expenses

Updated December 22, 2016 . AmFam Team

Having life insurance gives you peace of mind that you’re financially protecting the ones who matter most. It may help pay for debts like car loans, mortgage payments and other living expenses your family might be responsible for if you were to pass away. But that’s not all. Another substantial way life insurance helps your loved ones is by paying for final expenses, such as funeral costs.

Let’s see how having term life or whole life insurance helps your loved ones cover final expenses.

What are final expenses?

Final expenses are the costs associated with burial home fees, memorial services and cemetery charges — basically any of the costs associated with your death.

Do I need life insurance for final expenses?

The best way to answer this question is by asking yourself if your loved ones could afford to pay for final expenses if you were to pass away out of pocket. Most funerals cost around $7,000 to $10,000, which can be a substantial hit to one’s bank account, especially if it’s unexpected. Funeral costs, placing the obituary in the newspaper, buying flowers, food for a commemoration meal after the memorial service, even medical bills — consider all of these final expense costs your family would be paying for. Apart from all the other great ways term and whole life insurance may help your loved ones financially after your passing, they may use your life insurance to cover the immediate financial impact of final expenses.

Naming a beneficiary for final expenses

If you plan on using some of your life insurance policy for final expenses, you’ll want to choose a trustworthy beneficiary who understands your desire to use a portion of the death benefit specifically for final expenses. Learn more about choosing a life insurance beneficiary.

You may also be able to choose a funeral home as your beneficiary for your final expenses. This option has a number of benefits, including maintaining the right to choose where your service will be held. Talk to your agent if you want to learn more.

By taking the time to consider the costs of your final expenses, you’re proactively protecting your loved ones' financial future. Talk with your American Family Insurance agent to plan ahead and ensure you have the right life insurance coverage to protect what matters most.

Dividends are not guaranteed.

This article is for informational purposes only and includes information widely available through different sources. We do not make any guarantees or promise any results based on this information. This article does not afford, offer, or guarantee any coverage.

Neither American Family Life Insurance Company nor its agents are authorized to give legal or estate planning advice, and this article should not be construed as such advice. Customers should consult an attorney or estate planner for answers to legal and estate planning questions.

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