Life Insurance and Offsetting Funeral Expenses

It might seem quite macabre to pinch pennies immediately after the death of a loved one. But, with ever-increasing funeral costs, cemetery rents and rising expenditures associated with a death in the family, it s important to approach funeral arrangements with some consideration to simple economics. The National Funeral Directors Association compiled the following figures on the costs of a typical adult funeral in the United States:

$1,595 - Non-declinable basic services fee
$233 - Removal/transfer of remains to funeral home
$550 - Embalming 
$203 - Other preparation of the body
$406 - Use of facilities/staff for viewing
$463 - Use of facilities/staff for funeral ceremony
$251 - Use of a hearse
$120 - Use of a service car/van
$119 - Basic memorial printed package
$2,255 - Metal Casket
$1,128 - Vault
$7,323 - Total Cost

(Information courtesy of NFDA)

After a burial, headstone, obituary and wake, funeral costs can easily surpass ten thousand dollars. With high costs for even the most requisite of funeral arrangements, a life insurance policy can help ease the financial burden of bereaved family and friends

Before you purchase a life insurance policy, it is important to have a ballpark figure for the expenses you expect for a funeral. While it s entirely possible to arrange an affordable memorial service, there are many peripheral costs and unforeseen expenditures associated with most deaths we suggest a minimum of a $10,000 allocation of death benefits for funerary services.

There are a number of advantages to paying on a life insurance policy over traditional stock investments. Most notably, payouts on life insurance policies are not taxed, so the beneficiaries of a policy are free to use funds as they see fit without paying estate or other taxes. Of equal importance is the fact that with a life insurance policy in place, family and friends will not have to liquidate assets at a loss to cover expenses.

In the event that a comprehensive life insurance policy does not suit your situation ideally, there are insurance alternatives available that will only cover funerary costs such policies typically have lower premiums.

Even thinking about a loved one s funeral can be uncomfortable. But by discussing funeral wishes and preplanning a fitting memorial service, everyone in the family can have some peace of mind. Life insurance is an optimal means of lifting the burden of financial insecurity from the shoulders of grieving family.

For more on life insurance policies, see our life insurance site you ll find reviews and side-by-side comparisons of leading insurers to help you secure the future wellbeing of your family.