Can I Afford to Die? Funeral Planning & Final Expenses

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Most of us plan on dying, but many could stand to do more planning for death. The good news is that even if you only expect to have a handful of years ahead of you, it's not too late to make good financial decisions and good funeral arrangements. Trust me: this is not something your family is going to want to do for you at the same time that they're coming to terms with losing you-especially if they get hit with the expense of laying your remains to rest. Don't worry, though; I'm here to walk you through it.

—Funeral Planning—

Arranging for your remains is not complicated if you've got a little coaching. The important thing is not to leave anything out. There are cases of individuals who arranged for a burial plot but no casket or funeral. And how much worse to pay for all the bells and whistles, then have nowhere to bury the body!

Entire funeral plans tend between one and ten thousand dollars, including a grave, casket, service, bouquet, and transportation. Work with a funeral home to ensure that you've left nothing out of your plans.

To spare your survivors as much work as possible, you can nail down your funeral plans by handling the finances in advance. You can pay the funeral home in cash, purchase funeral insurance from the home, or assign the funeral home as the beneficiary of any life insurance policy.

-Final Expenses-

There's the funeral, and then there's paying for it. And there's also paying for other final expenses, some of which are not completely foreseeable but can be planned for, nevertheless. In your final financial planning, consider not just funeral costs but probate, estate, and medical costs (fatal illnesses and accidents claim many lives but often not before racking up bills that can cripple one's survivors).

Here are two questions to answer which will help your plans come together: how much should I plan on spending and how am I going to get the money together?

-How Much-

Answering how much is a stumper for many people, but determining the correct amount is relatively simple: for both funeral and medical expenses, it's always about how much you're willing to pay. If you want Styx to play at your wake and you can afford it, go with it. Decide here and now how much you'd be willing to pay to try to stay alive in the face of serious disease. (Hospitals are notorious for recommending more treatment than a person needs, and they might keep putting expensive needles in you for two months after your death if you don't draw the line somewhere.)

—Funding Options—

If you've got the money on hand, you can pre-pay for your funeral arrangements and tuck the rest of your funds away for medical and probate costs. If not, though, life insurance may be a cost-effective option for you. With appropriate planning, you will get more money out of the policy than you put into it.

You can buy final expense life insurance from a life insurance provider, or your funeral home might actually employ a life insurance agent who is licensed to sell funeral insurance. These two types of insurance are essentially the same concept, though there is a diversity of different life insurance products which may be marketed as "funeral insurance" or "final expense insurance" (simplified issue, guaranteed issue, graded benefit, whole, term).

Because final expense insurance policies are designed with aged or ill people in mind, even most people who have been declined for ordinary life insurance coverage can qualify for coverage under a final expense insurance product. Naturally, these products are more expensive than ordinary insurance, but funeral insurance is still affordable for most people because the policy's death benefit doesn't need to be more than several thousand dollars. Policy face amounts for final expense life insurance tend to fall between $5,000 and $50,000.

What if you probably have more than a decade remaining to you? You can use any life insurance product for final expense planning. In fact, you can buy a policy now (when your insurability is good) and assign the death benefit to your funeral home in advance.

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