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What to do when your Loved One Dies Without Life Insurance?

What to do when your loved ones die without insurance

Many people today invest in life insurance so that they can lessen the burden of financing a funeral. Funeral insurances are an efficient way to do this. Funerals today cost upwards of $10,000 and can leave many people in debt afterward.

Even a minimalist funeral with the bare essentials costs an average of $5,000-$10,000. It is not easy money. So what to do when someone dies without life insurance? It can leave your family to bear the brunt of the funeral costs. This expense is not something most families with an average income can recover from, especially if they don’t have any savings. A final expense insurance is what saves a family at this hour.

A life insurance policy is an investment over the years. After a specific amount of time paying premiums, the colossal amount at the end goes to the surviving kin of the deceased. There are many different life insurance policies that one can avail from the available insurance providers or companies on the market. Depending on the insurance package’s terms, the insurance can help the family compensate for the loss of work or wages, costly medical expenses, or final funeral expenses. These insurance policies ensure that the insurance coverage adequately covers the funeral charge or any other cost the family may face in the future, so they are not financially weakened or left struggling for money afterward.

What are the various funeral expenses a family will have to bear?

funeral expenses a family will have to bear
funeral expenses a family will have to bear

People buying life insurance generally try to find a policy that will help them pay for funeral costs. This preference is because they are aware of the present funeral charges and are future-proofing their finances.

At today’s prices, a funeral could cost anywhere within $5,000 to $25,000. The cost depends on the service planned; the flowers, wreaths, coffin, pit, and other factors add to the price. The following is an approximation of a funeral cost for reference.

Coffin or Casket – The casket or the coffin is one part of the funeral you cannot do without; it is also the most expensive part of the funeral budget. Depending on the material of the coffin/casket, the starting price is around $2,400. If you prefer other materials like bronze, steel, and other metals, the price is in the high-end range.

Embalming and Mortician Services – This service is optional but recommended for an open-casket funeral. A mortician can do embalming in case you are planning to have a viewing. Embalming can cost above $750, and this is the price quoted by the National Funeral Directors Association (NFDA).

Gravesite or Cemetery Plot – This pricing varies, depending on the cemetery type, the size of the burial site or plot, headstone designing costs, etc. Generally, an average size plot will cost you around $2,000 to $2,500; this cost could be higher in larger cities and metro areas. These plots can also be bought or booked in advance from the cemetery.

Gravestone – A gravestone’s price differs across types. A flatbed headstone can cost around $1,000, while an upright marker can cost about $10,000. Other variables, including color, the material of the gravestone and the finish, and the engraving length and format, significantly affect the price and could outdo the casket’s cost itself. Materials of the gravestone include – granite, marble, sandstone, and metal. Metal gravestones are the costliest, but veterans get marked headstones for free for their service to the country.

Flowers – Depending on your décor and design, the flowers required for the funeral can cost upwards of $200 and may even go above $1000. Flower décor, like a bouquet, spray, wreaths, boutonnieres, has a different cost. The flowers you choose could affect the price.

Catering Services – Catering for a funeral is a costly affair. Depending on the number of guests and the type of spread, the cost could be anywhere around $500 and above. The number of dishes also increases the amount.

Memorial Service for the Deceased – The NFDA quotes a memorial service cost to around $2,000 to $2,500. A memorial service package includes organization and planning, obituary content, death certificate, other permits, gravesite services, viewing or open-casket services, etc. The planners themselves take care of everything for a one-time fee, and this fee depends on the services they provide. These planners have a variety of funeral packages that differ based on the services offered. The cost could also vary with the state.

Cremation Services – Some customs and traditions may call for cremating instead of burying the body, or it could also be a matter of personal preference. Cremation can cost between $500 to $1,500, depending on the area of residence.

Transportation – The transportation cost is something most people tend to miss out on while budgeting for a funeral. Transport in a funeral is a double cost as you have to pay an amount for the hearse and a separate amount for the van or commercial vehicle. A hearse will easily cost around $300 and the transportation another $150.

Obituary – obituary costs are hard to calculate as they differ from state to state and publication to publication. A rough approximation would be $600 for a national newspaper; this, of course, depends on the word length. If you want to include a photo, then the costs only increase from there.

Travel Expenses – Travel expenses could be a significant part of the funeral budget if its inclusion becomes necessary. The incurring of these expenses happens when the deceased’s body is in another city and has to come home. Preservation, tickets, cargo altogether could lead to a hefty sum. Otherwise, if they bury their loved ones in another city, they will have to fly to and fro. These tickets, especially if booked at the last minute, can considerably increase the budget; without calculating the hotel and food expenses.

Debt and Taxes – The death of a spouse can be tough on the other. They will have to shoulder the additional burden of debts, if any. They will also have to pay for any medical expenses that occur in the funeral process. The other spouse will also have to take up any leftover tax payments, and if the house belonged to the deceased, they are liable to pay estate tax. This tax could amount to a reasonable sum, which they may not be able to afford without selling the house. There may be other expenses too, which the deceased was taking care of, now their kin will have to take those expenses upon themselves.

Loss of Wages – If the deceased was the sole bread-winner of the family, it could lead the survivors into penury. Not only will they be grieving the loss of a loved one, but they will also have to find work to support their family and maintain their status quo. The loss of a chunk of the family’s earnings adds a burden to the already massive emotional one.

Counselling and Therapy Services – The death of a loved one is hard on all their surviving kin and friends. The loss of an emotional attachment could have adverse effects on the people around the deceased. This effect can be seen in children, as they may not openly express how they feel about the situation. If the child is much younger, then that is a further complication. In such cases, it is necessary to engage the services of a grief and trauma counselor, who is adept at helping people of all ages cope with their grief. Typically, medical insurance may not cover counseling, so you will have to pay about $100 per session. Each session lasts for an hour, and more than one session per individual could be necessary. This cost could total to a massive amount that isn’t covered by insurance either.

What Happens When your Spouse Dies Without Life Insurance ?

What Happens When your Spouse Dies Without Life Insurance
What Happens When your Spouse Dies Without Life Insurance

Any loss or death within a family is a matter of great tragedy. It is an irreplaceable void. This loss becomes tremendously more difficult when the loved one is not insured. The lack of insurance means there isn’t an inflow of funds after their death to their loved ones. Life without any insurance is strenuous and problematic. We have heard so many stories of people suffering because of a loved one’s death without life insurance.

People who have limited financial means have very few financial assistance options when they have to hold a memorial service or foot the bill for a funeral. The costs mentioned in the previous section can daunt even the most sturdy hearts. The remaining spouse will require all the help they can get to hold a funeral, and they can probably get financial assistance in the following ways,

Loan or Mortgage – The surviving spouse can take a loan or mortgage to pay for the funeral and other expenses. While this is an effective solution, it is temporary and brings more trouble than it is worth. After the funeral, the spouse will have to pay back the loan and the interest, which could be pretty high. If they have mortgaged any collateral and cannot pay the mortgage, they stand to lose the collateral. If the collateral was the house, that could make the situation much worse.

Funeral Plans or Funeral Payment Funds – Certain companies allow the spouse or next of kin to get a loan to conduct the funeral. Some funeral directors also offer loans for the same purpose. These directors will require an up-front deposit from the kin of the deceased. After that, they have the option of paying it back in installments. This offer may seem like an attractive one, but finding a director who offers a loan at a good value or within budget can be quite tiresome.

Different Programs that can Support your Family in Case you die without taking a Life Insurance

Different Programs to Support your Family in Case you die without taking a Life Insurance
Different Programs to Support your Family in Case you die without taking a Life Insurance

So what to do if someone dies without life insurance? In addition to the options mentioned above, the government and other authenticated agencies offer a few payment modes for a funeral. The surviving kin can make use of this opportunity if they have no insurance to claim.

Social Security Programme

The Social Security Administration or SSA has programs that provide a particular amount to the kin of the deceased, especially if their husband died without life insurance. If they are a widow, they are entitled to receive a sum of $225; this is according to today’s rate. This sum is a one-time death benefit and is not valid again.

The children and the deceased’s spouse dependent on the deceased may be entitled to a monthly recurring amount or a monthly benefit. This benefit is entirely reliant on the deceased’s work record and his/her earnings. If they were the sole bread-winner, then that makes it all the more likely that their spouse and children will get a monthly benefit. This benefit amount is a calculated percentage of the deceased’s earnings and depends on the number of years of employment. The recipients will have to meet these requirements to be eligible for the benefit.

Government Authorities and Charitable Organisations

There are quite a few charitable organizations dedicated to helping people have a funeral or memorial service for their loved ones. They mainly help widows who cannot afford to have a funeral for their spouse. Each state will have its charitable organizations.

The Indigent Burial program is another option for the residents of some states. These programs offer up to $1,500 in burial assistance and $500 for cremation proceedings, which differs across states.

The Veteran’s Benefit

The surviving kin of veterans is qualified for benefits from Veterans Affairs or VA. This amount is a pension and is available for people of the low-income group who have lost a dear one to the country’s service. The VA benefit amount differs on the reason of death. If the veteran died during a war, their family is entitled to $2,000 towards final expenses. If they died due to non-service related reasons, the family is entitled to $796 and an additional $300 for hospitalization charges (if any). The veteran also has a small burial site set aside for them, and an internment allowance for the family may also be available.

Crowdfunding

Crowdfunding is not an entirely reliable source of burial funds, but it is a last resort. The family of the deceased can make a public appeal stating their situation. Then hope that enough good samaritans donate to their cause so that they can collect enough money to hold a decent burial for their loved ones. People are pretty skeptical of these campaigns today, and many people might not donate.

Policies for Burial Expenses and Funeral Expenses That Should be Avoided

Many TV ads and magazine ads publicize a hoard of burial or final expense policies, which claim they are the best solution for those worrying about funeral costs they may have to incur in the future. While this may seem enticing, there isn’t much substance to what they say. Do not be lured by these advertisements. It is better to consult with a burial or funeral policy specialist before enrolling or taking up such policies.

These types of policies are nothing but a lure. They entice the viewer with offers that seem good at first but later jack-up the premiums or deny insurance claims using terms like “waiting period” and others. They may even increase the premium rates to such a high price that you inevitably cancel the policy as you can’t afford it. When you cancel it, you are not eligible for refunds of the previous premiums you paid. It will turn out to be a waste of a lot of money, and after dying without life insurance, your family will have no fall-back funds. At the end of the ordeal, you will most likely regret purchasing the policy.

Why you need Assistance for Final Expenses?

Insurance agents are usually decent and reliable people. But some are only interested in making a quick buck. These agents will seem authentic and sympathetic, but they will sell you the most expensive policy on the market so that they benefit more out of the transaction than you ever will.

Another issue is the policy itself. Most are straightforward and will not have any “waiting period” for the benefits to come into action, but there are policies with a minimum waiting period of 2 years. It means that in the event of a death due to natural causes within the waiting period, you will not get the coverage amount; you may get back the premiums you paid so far with a small amount of interest.

These policies are all very well, and any agent will be able to tell you about dozens of policies with dozens of benefits, even those with immediate coverage. But a life insurance agent has only a very general knowledge of burial or final expense policies. They may not be aware of all the different options available, and you may miss out on an acceptable policy that would better suit your situation.

How can they help you ?

A final expense insurance is explicitly for final expenses rather than life insurance, which is more of a general policy. This policy will be more helpful as it can pay for everything that a funeral or memorial service will require; the funeral is the better option. A final expense policy is also beneficial in ensuring that there is an amount ready for any funeral that might become necessary. A life insurance coverage once claimed may be spent on other things, and at the time of the funeral, you may find that you cannot afford it. Having such an insurance policy ensures that your loved one gets the send-off they deserve and a memorial service that pays them the utmost respect.

Our agents have associations with more than twenty finance companies catering to final expense policies, and we can help you better than an insurance agent. We have the expertise and knowledge to get you the right policy for your needs and budget. We can also assure you of immediate coverage. When you first try to do some research on the available packages, it can be quite overwhelming. Still, our experienced agents have this knowledge at their fingertips and quite effortlessly recommend a plethora of policies that are best suited to your circumstance. We only require details of your age, health, and medical history, and your financial situation to find the best policy for you. We can ensure you don’t face any financial burden because of the death of a loved one.