5 Steps To Plan for Final Expenses
Key Takeaways
- There are several steps you can take to prepare for the costs of your funeral and related expenses.
- By creating an end-of-life plan, securing important documents, and enrolling in life insurance, you can make a difficult time more manageable for your loved ones.
- Final expense insurance is an affordable and flexible option that can be vital to your end-of-life plans.
If you’re like most people, you’d rather not think about your own passing. However, planning for the costs of your funeral and related expenses can help leave your loved ones with greater financial security and peace of mind.
Here are five steps you can take in final expense and life insurance planning to support your family’s future.
Secure your family’s future with Final Expense Life Insurance.
Contact GoHealth to find coverage that fits your needs.
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1. Determine Your Final Wishes
Consider your preferences for your remains after death or the funeral service. Some of the possibilities you may consider include:
- Do you want to donate your organs?
- Would you prefer for your remains to be buried in a casket or cremated?
- Is there a particular place where you want to purchase a cemetery plot?
- Would you like your family to work with a specific funeral home?
- Are there religious observances or other traditions you want to be included in the ceremony?
Once you’ve determined your final wishes, research the costs involved. According to the National Funeral Directors Association, the average cost of a funeral with casket and burial was $8,300 as of 2023, while a funeral with cremation cost $6,280 on average.
Based on that information, you can plan for final expenses. Some people even make arrangements with a funeral home in advance and pay a portion or all of the costs themselves.
2. Document Your End-of-Life Plan
Help your loved ones through a tough time and give them the confidence to settle your financial affairs by clearly communicating your wishes for the end of your life.
This process may involve preparing several different documents:
- Will: Work with a lawyer or (if your financial situation is relatively simple) use a software program to create a will. You should name an executor who will be responsible for your estate and provide directions for dividing your assets. Follow your state’s requirements for signing with witnesses.
- Advance directives: Fill out legal documents, such as a living will, stating your preferences for care if you’re ever unable to communicate.
- Durable power of attorney for finances: This legal document designates who is responsible for managing your financial affairs if you can no longer make those decisions yourself.
- Letter of last instruction: Write a letter to your family with all the information they need to manage your affairs and fulfill your last wishes. This may include financial details, the locations of relevant documents, people to notify about your death, and your preferences for the funeral and burial.
3. Secure Personal and Financial Information
Monthly bills and financial statements can pile up over time, making it challenging to track down the documents that really matter. Keeping your records in order will simplify the process of carrying out your last wishes and meeting any financial obligations.
Set aside the documents your family will need to understand your finances and manage your final expenses, including:
- Your will
- Birth certificate
- Marriage certificate
- Bank and retirement account numbers
- Insurance policy details
- Car title and registration
- Mortgage and debt information
- Your latest tax return
Choose a secure place to store these crucial papers, such as a fireproof safe. Tell a trusted family member or attorney where to find the documents and provide them with the lock combination or key.
4. Explore Your Life or Burial Insurance Planning Options
Life insurance helps your family manage the expenses of losing a loved one. Various policies are available, so review your options to find the best fit for your budget and needs.
The most common types include:
- Term life insurance: These policies provide coverage for a designated period of time, from a single year to several decades. However, there is no coverage if you outlive the policy term.
- Whole life insurance: These policies last your entire life, but they generally charge higher premiums.
- Final expense or burial insurance: Unlike other types of insurance, these policies are not intended to replace your income. Instead, it is a more affordable life insurance option that helps your family with immediate costs, such as a funeral and medical debt.
Underwriting, the process of deciding your eligibility, is another important distinction between plans:
- Fully underwritten policies are often relatively affordable but require a medical exam.
- Simplified issue policies don’t require an exam, but you do need to answer medical questions.
- Guaranteed issue policies don’t require an exam or questions, but they tend to cost more and offer less coverage than the other options.
Secure your family’s future with Final Expense Life Insurance.
Contact GoHealth to find coverage that fits your needs.
Mon – Fri, 8 a.m. – 6 p.m. CT | TTY: 711
5. Get Covered
Once you’ve decided on the right life or final expense insurance for you, enroll and be sure to maintain your coverage to keep your policy active. In case of an unexpected illness or accident, you don’t want to leave your family unprotected.
Keep in mind that even after you sign up, some life insurance plans require a waiting period before your beneficiary becomes eligible to receive a death benefit. If you want to make sure you’re covered right away, look for a policy that has no waiting period.
In addition, some life or final expense insurance plans may offer flexibility in using your benefits depending on life events. For example, some plans can help with long-term care costs or treatment for terminal illnesses.
Speak with a licensed insurance agent for more information about how life insurance or final expense insurance could fit into your plans.