Three Options to Cover End-Of-Life Expenses
Funeral expenses are a topic that many people probably aren't keen to talk about. But the reality is that the expenses after a death are no small figure, and it's essential to plan for what will happen after you or a loved one passes away.
Funerals can range wildly in expense and it's important to consult all of your options when planning. According to the National Funeral Directors Association, the average funeral (with viewing and burial) cost over $8,500 in 2017. However, funerals can be much more expensive or cheaper depending on your preferences.
That's a sizeable chunk of money so it's vital to have an idea of how a funeral will be paid for. Plan ahead so you don't leave your loved ones behind with a financial burden.
This article will go through some of the options you have in preparing for end-of-life costs.
This is sometimes called final expense insurance, and it goes specifically towards your funeral costs and any debts you may have accrued in your final years, such as senior housing.
There are critics of funeral insurance who say that the money you get for the premiums you pay is not great when compared with traditional life insurance.
However, if you have a pre-existing condition or any other reasons that you can't purchase life insurance, funeral insurance could be an alternative that's easier to attain.
Prepay With a Funeral Home
If you prefer, you can set up a prepayment plan with a specific funeral home in advance. Each province has different laws to protect consumers who enter a prepay plan so it's important to read into what the terms of your contract are, and about what happens if the cost of a funeral goes up or down from the time that you start you prepay plan.
Once again, prepay plans can come with some downsides, such as high premiums or the inability to withdraw payments. This is why provinces have felt the need to protect your rights with laws around these kinds of plans.
Most opt to keep things simple and have a life insurance policy that sufficiently covers their funeral expenses.
You should also consider if you might have any debts remaining if you pass away and whether your life insurance will be able to cover both the expense of your debts and of a funeral.
Comparing life insurance policies is one of the best ways to protect your loved ones from the financial burden of end-of-life expenses.