Many of us reach a time in our lives when our age and health cause more concern. Our thoughts might turn to the feelings of loss and despair our children will face. Losing a parent is difficult, and in the sudden onset of loss, the last thing you want is for your child or children to face additional burdens. And so you might wonder if your children will be forced to pay for your funeral.
Planning for your funeral expenses is wise. When you include your funeral expenses in your estate, you can relieve your children of the financial responsibility. However, if at the time of your death you couldn’t make those plans and hadn’t purchased insurance options that cover funeral expenses — such as burial insurance or final expense insurance — your children may need to cover the costs.
Are Your Children Legally Obligated to Pay Funeral Costs?
The good news is that your children cannot be legally forced to pay for funeral expenses. If there is any money in your estate, it will pay for the funeral and cremation or burial costs.
If you earned the required number of Social Security work credits, the Social Security Lump-Sum Death Payment can also pay some expenses. However, the typical payment is only $255. Median national funeral costs average $8,000, so the Social Security payment won’t cover much. Cremation is more affordable than a burial, but the average cost could still be $5,000 if there are other funeral costs.
An exception is if you are a U.S. military veteran. You could choose a burial in a national cemetery for free, or you might opt to receive a payment from the Veterans Administration to cover burial expenses in another cemetery.
If your children are unable or unwilling to pay for funeral expenses, your final county of residence might provide some financial help. If there is no assistance available, another option for your children is to pay for a cremation only or leave your remains with the coroner or funeral home to handle.
This is not the most desirable option, and chances are your family would not want to see you treated in this manner. It is best to consider other options that will ensure your children can provide you with the funeral you deserve without worrying about a large financial burden.
Using Your Estate to Pay for Funeral Expenses
As mentioned above, money left in your estate can pay for your funeral expenses. However, the legal process of distributing your estate assets can take some time, and the funeral costs are often due before the estate settlement is complete. Most funeral homes require payment when the services take place, so your children (or another relative) will be responsible for the costs before they receive reimbursement from the estate.
However, suppose the estate was set up with a funeral trust. In that case, the executor of the estate or an attorney can pay the funeral costs directly from the trust, saving your children the difficulty.
Prepaying for Your Funeral
Another option is to prepay your funeral expenses. If you want to ease the burden for your children, consider this a convenient option as long as you have the finances to do so. The only drawback of prepaying funeral expenses is that your funeral plans or wishes may change afterward. You may even move to another part of the country, or a funeral home might try to tack on additional costs. Consider prepayment carefully before opting for this course of action.
Using Medicare Supplements to Pay Funeral Expenses
You may wonder if your Medicare supplements can pay for any funeral costs. Unfortunately, they cannot. Because funeral and bereavement costs aren’t considered medical expenses, your children cannot pull from money in a Medicare or a Medical Savings Account plan.
Insurance Options for Funeral Expenses
You can purchase insurance for funeral expenses at any time. It is likely the least expensive option and will provide enough finances for your children to cover funeral costs without you needing to worry. There are a few types of insurance available.
Term Life Insurance
Term life insurance is a good option because you can choose different amounts of coverage based on your needs and budget. Do you want to leave a large legacy to your children, or are you just concerned with making sure they have enough to cover funeral expenses? Keep in mind that term life insurance only provides payment to your beneficiary if you die during a specified term. It’s a guaranteed death benefit. They will base premiums on your age, health, and life expectancy.
Final Expense Insurance
If term life insurance premiums are too high because of your age, you can opt for final expense insurance. This type of life insurance offers a small death benefit and is typically easier to get approved. Some insurance companies also refer to it as burial insurance. The policy payout is smaller than a term life insurance policy, typically ranging from $2,000 to $50,000.
Because the payout is smaller, it is also more affordable. And, when the money goes to the beneficiary, anything that isn’t needed for funeral expenses can be used for whatever else your children might need it for, such as paying off a mortgage or setting up a college fund for your grandchildren.
If you don’t have an existing insurance policy that can pay for your funeral expenses, final expense insurance is a worthy consideration.