Funerals can be a big expense, on average nearly $10,000 in the USA even if you plan for them or not.
There are many factors that come into play for the cost of the funeral. Some people are lucky to have savings or even insurance to cover most of the costs, but what if you don’t fall into this group?
Paying for a funeral without life insurance is possible with good research and an understanding of what costs are involved. Asking the correct questions and not settling for the first package offered makes a funeral affordable for most budgets. When money is tight, other resources are available.
Whether you are organizing the funeral for someone who has just passed or being proactive and planning for your own final preparations, you aren’t alone.
Many Americans, and people all around the world, die without having life insurance, and they all are given a fitting send-off.
In this article, I will cover some of the things you’ll need to know in order to organize a funeral despite the lack of life insurance, so please read on for more information
Is NOT having life insurance such a problem?
Although on the face of it funerals are very expensive affairs, if more was known about the process the less money would be spent.
Despite the fact that we all want to honor our deceased loved one, wasting unnecessary money on unnecessary extras from funeral homes isn’t the way to do it.
Life insurance covers many things, and the funeral is just one part of that. So, even if there is no life insurance policy, it’s still possible to have an affordable funeral with a little extra work.
Here are some quick tips before we get into the real meat of this article which will save you thousands on any funeral you may be planning.
Tip 1: Ask to see the cheapest option.
When dealing with a funeral home don’t feel intimated or judged into not asking for the lowers the possible price on everything.
The funeral business is a very lucrative one and it’s partly because people never ask for what they really need.
For more information on the types of questions you should be asking when meeting with a funeral home, please read my full article here.
Tip 2: Supply your own casket.
You can also get excellent quality caskets online for a fraction of the retail price in a funeral home. I recommend Titancaskets.com who have some excellent deals!
Tip 3: Opt for a cremation
The easiest way to save money immediately on a funeral is to go with cremation over burial. You will save thousands just with this one decision.
Tip 4: Host the funeral in a religious center.
Compared to a funeral home, a Church, Mosque or Synagogue will be far cheaper when it comes to a funeral ceremony.
Now that we have spoken about the fact that life insurance isn’t essential to pay for a funeral as you can make vast savings if you know what to ask for (more detail on this later in this article), I think we should discuss the other alternative.
What do you do when you really have no life insurance and no expendable income to pay for the funeral of a loved one.
What do I do when my child, spouse, or parent dies without having life insurance?
If this happens to you and you have no way to pay for the funeral you do have a few options.
Depending on their age and history you can apply for funds from different charities, and organizations (see my article here). There is a lot that can help you pay for these costs or help you to plan for the future.
Not all places have the money to assist you but they can help you to plan or point you in the right direction to someone that can help you financially.
Below I have outlined a few, but check out the other articles for other charities and organizations.
These are three organizations that can help out with the burial of a child whether you have insurance or not.
These are just national ones, so be sure to check locally as well.
- Final Farewell’s is a charity that focuses on families that are burying a child. This nonprofit organization can help you relieve the expenses and also give guidance. They will try to organize an affordable burial and ceremony for your child if they are under the age of 18.
- The TEARS Foundation is another nonprofit that can not only ease the financial situation that arises from trying to bury or cremate your child. This foundation also helps to connect with other families with other support groups and families who have also lost children in order to help with grieving.
- Children’s Burial Assistance is also a non-profit charity that is based in Georgia and does all of the same things as the two charities mentioned above. They do serve the whole country and not just the state of Georgia.
When it comes to looking for financial help for a spouse or a parent it is more of knowing their life and work history.
There are a lot of organizations out there locally and nationally, but most of these serve a certain group of people. I have outlined some below but do your due diligence when looking into funding for a funeral for your spouse or parent.
Military organizations/charities – Some if not all expenses can be reimbursed by the Veterans Affairs to the member of the families. The VA will pay for the burial and plot expenses. If death is non-service related, the maximum amount is $300. In the case of a service-related death, the maximum is $2,000.
These funds can go to pay for burial plots, vaults, grave liners, cremation expenses, and grave fees. This is not the only organization that covers expenses for current or past service members, read more on how to pay for a funeral if they served here. (See my full article here)
FEMA- or Federal Emergency Management Agency, can financially help some families in burying a loved one. These FEMA services can include the cost of a casket or urn, mortuary services, transportation of the deceased, cremation, marker or headstone, etc.
In this day and age with viruses and natural diasters running rampant, check with the guidelines as they are changed and updated often.
Federal Government/Social Security– The Federal government in the US does not help out much with a funeral or burial. But if your parent or loved one is receiving Social Security benefits, they may be eligible for the one-time death benefit of $255.
It is not a lot but it is something, to see if they are eligible you can call at 800-772-1213 or visit an office by location them via this link to apply for benefits. The government does not have an online form option.
Medicare & Medicaid– Medicare and Medicaid offer no funeral assistance but you can put aside and set up a fund with up to $1,500 tax-free per person ($3,000 for a couple) in advance for funeral expenses.
Victim Compensation Program or Accident Compensation – If your spouse or parent was a victim of a crime or was in an accident, you can look for assistance for the funeral in the state the crime or accident occurred. Speak to a lawyer for more information about this.
Religious Organizations– Churches, Mosques, Temples, and houses of worship are willing to help members to cover burial costs. Even if you are not a member of that specific religious organization but living in the community, you can still ask for help as these places can be generous.
Memorial Societies– There are over thirty-eight different states that have memorial societies and these places have options for you to join at a very low cost. It usually a one time fee and they offer a lot of discounts on products and services. It is a wise investment for those without life insurance and planning ahead.
Native American/ Indigenous- In States such as Alaska, Arizona, and others with larger populations of indigenous American communities, they often have burial assistance to tribal members who are in need.
All states though do have it in one form or another but you may have to look a bit harder and have documentation. You can check with your local tribe or got to bia.gov to learn more about what you have access to.
How to budget for your own (all) funeral when you don’t have life insurance?
Direct burial– This is something that you can set up for and pay in advance. It is exactly what it sounds like after the body is claimed or released from the corners office the burial happens. There is no ceremony or service, you can even choose to be buried in a cheap casket like cardboard. Read more here.
Cremation- There are two types of cremation: direct cremation and regular cremation. They both go through the same steps as a normal cremation expect that for a direct cremation it happens right away. The body is not stored or and there is no viewing or service.
Cremation is already cheaper than a traditional burial and a direct cremation is an even cheaper option. If you were to provide your own container it would less as well. You can read more about cremation here.
Totten Trust or Payable-On-Death Account- This is a bank account that lets you save for your funeral. You designate a beneficiary to access the funds when you pass away and this person can be the funeral director if you have no relatives or family.
When doing this though leave behind a will so that they know where to spend the money since with these types of accounts the money can just be used for whatever purpose the beneficiary sees fit.
Employer or Union Benefits– Check the employee benefits with your company or union for benefit packages or assistance that can help with the burial and funeral costs.
DIY Funeral Service/Memorial– You can do almost everything on your own for a funeral is you have enough time, this way it can also be very inexpensive and exactly what you wanted.
Things from making the headstone to building your own casket are becoming very popular and you can read more about how to do it on your own here. You could even bury the body on your or a family’s property.
Donate the body– This is a special way to have a free funeral and to give back to society. If you are planning ahead you will have to fill out forms and or go to the DMV and make sure that it is on your license or state ID.
If you do choose this option check with the university or company to see what paperwork needs to be done ahead of time also go to aatb.org to see that they are accredited.
Saving account- You don’t have to even set up a special bank account a regular one is ok as well. If you want money to be accessible right away add the name of the person to the account and this money can be withdrawn immediately after you die.
They will not have to wait for the insurance check or probate. Having a will so that your wishes are known is key.
Prepay-You always have the option to prepay for a funeral, which is called a funeral plan. These are not that popular in the states but an option for you to look into. The major issue with these is that they may go out of business or the policy may change. Read about funeral plans here to be the judge for yourself.
Go green– This could be purely fiscal for you or you may really care about the environment but either way “going green” is a cheaper option for a funeral.
There a lot of different ways that a funeral could be “green” but the main tenets of a green funeral is that is simple and with the least amount of waste as possible. You can read more on green funerals in my article here to learn what things you do for your funeral to make it cheaper and greener
Keep it simple –The idea is the same as the green funeral but not focusing on all the products and ways to bury a body. Like a cremation is a very simple way or you can rent a casket (see my article) to save on costs.
Another one is that you legally don’t have to have a body embalmed read more here. There are a lot of ways that you can save.
Shop around– This sounds easy enough, but by calling and visiting as many funeral homes as possible, you can find the best price. The reason that you won’t find the prices online is that they don’t need to put them there.
But by law, they have to tell you and or show you the prices of everything even the cheapest options. This is due to the rules and regulations of the Federal Trade Commission. They legally don’t have to give prices by email or over the internet.
The website Funeralocity.com has prices of some of the funeral homes around the country.
Know your rights- Knowing and understanding all of your choices and options you have available is first. The “Funeral Rule” is by the Federal Trade Commission (FTC) to stop some funeral homes from taking advantage of you.
You can go to the website here to learn all of the finer points, but below are the main point.
Every state also has different rules and regulations so check those as well.
- Buy only what you want.
- Get all the information even the cheapest products and services over the phone.
- Get a statement outlining all the goods and services with prices included.
- Receive a written statement and itemized billing before you pay.
- Use a container of your choice for cremation.
- You can provide or make your own casket or urn.
- Choose to skip embalming.
What not to do to pay for a funeral.
Whether you are paying for your own funeral of the funeral of a loved one there are a few things that you should try to avoid at all costs.
If you have no options you may have to but try to avoid these below.
- Get a loan from the bank – These tend to have very high-interest rates and if you are leaving behind debt for others this can cause issues for them.
- Purchasing plans from funeral directors. – These are not always the best and cheapest options even though they are convenient.
- Cash advances– Similar to loans they have even high-interest rates and predatory.
- Payday loans– For some these are a necessity of life and daily living. But again these are predatory and your loved one would not want you spending your hard-earned money on this instead of the essentials.
- A 2nd mortgage/ reverse mortgage– The idea of a funeral is to remember a loved one, you don’t want to accumulate or leave behind debt.
- Pawn Shops- Selling all of the possession instead of giving them to a loved one or someone is not the way to go.
Who is responsible for paying for a funeral when there is no money?
When there is no one to pay for a funeral or the family member not to pay for it for one reason or another the county/ state will pay for the costs.
One will need to sign a form at the funeral that states that they are releasing the body into the custody of the local corner.
They will then either cremate the body or have it put into a communal grave. If the body is cremated you may be able to get the ashes back for free or a small fee.
For more information on this, please refer to my following articles:
- Tips That Work: How Do You Pay For A Funeral With No Money?
- What Really Happens When Someone Dies With No Known Family?
Perhaps you or your loved one has a life insurance policy, but it may not actually cover everything you may think, so let’s discuss this possibility now.
What expenses does life insurance actually cover?
There are two different ways to look at life insurance and what it covers. It can be broken down into two parts the expenses it covers and the type of deaths that it covers.
The amount of money that one will get will cover most or all of the expenses that currently have and will have in the future depending on the plan.
Expenses that life insurance usually covers.
Household- The expenses that are usually covered by a life insurance policy are things like your monthly bills & everyday expenses.
These included things like rent or mortgage, gas/ electric, groceries, basic household essentials, etc. The idea of a life insurance payout is to cover the bills and allow the family to maintain their current standard of living.
Please read my article on who is responsible for utility bills when someone dies for more information.
Mutual debts- If you and the deceased share a mortgage, credit card, or student loan you will still have to pay that back. The co-signer is still responsible for the outstanding balances.
This also includes if you are not the official co-signer, anything that relates to you and them could be covered by life insurance.
Child care – A life insurance policy would also include coverage for child care that you are paying now. This includes daycare, after-school programs, in-home aides, and all other types of childcare.
This could also come up if the one who died either was the one who watched the children or the one that was the sole income earner. In both these situations, the other one may have to go back to work.
Dependent care- Some people are taking care of their parents or special needs adults as well. Most types of life insurance will cover these costs as well.
College tuition- This could be for you or your children and does not have to be at the present time. College now has a very expensive price tag and should be factored in.
Funeral/ burial expenses – This is what most people think of when they hear life insurance. With the average price of a funeral and burial with a casket costing around $8,000, you would want this included in your policy and it stated exactly what it covers.
Types of deaths that it usually covers.
For most, the basic standard life insurance policy will cover almost all types of deaths related to illness, accidents, and natural causes, with a couple of stipulations.
No matter the cause it has to be still active and not expired.
- Natural causes– Having a heart attack and old age are the two major ones but the policy should include all conditions.
- Accidental death-These will be when someone dies in a car accident or from an incident such as falling from a ladder around the house. Not incidents are always covered and be sure to check the policy.
- Suicide- Sadly, most policies will not cover this if the death was ruled a suicide.
- Murder-If a murder was to occur it would be covered unless it was a case of suicide by murder.
What does life insurance not cover?
So when won’t a life insurance payout?
It’s rare, but in cases of expired policy, fraud, criminal activity, or exclusions, your beneficiaries may not receive the death benefit.
Expired policy– If you have a term life insurance policy it will end after a set number of years. If you want it to cover all of your life choose a whole life insurance policy and as long as you pay the premiums it will cover you till the end of your life.
Fraud- This is usually looked into when the policy is relatively new (under two years) and if the death was suspicious.
This also could be for something such as you said you were a non-smoker and you lied about it. So be truthful when filling out the paperwork, you don’t want your loved ones to be stuck with paying all the expenses.
Criminal activity- Comminingt a crime or being involved with one will most likely void the plan no matter what.
Exclusions- Though these are rare life insurers may have stipulations about things that you should not do. This is rare because they are more likely to charge you a higher premium and included it in the policy than to outright deny policy.
Long-term care- If you’re sick but haven’t died, most of these plans will not cover your expenses and you will need a separate policy for that.
Accelerated death benefit– Not all policies do this, but some will take the money from the total death benefit, as needed.
How much does life insurance usually cost?
It is impossible to give you an exact number on what it usually costs but for a 30-year-old nonsmoking, healthy male, with no pre-existing conditions (with a doctor’s check-up) who signs up for a 50-year policy it will cost around $600 a year.
Life insurance rates are based on a few main factors such as life expectancy, gender, age, health, and if you smoke.
The earlier you buy it the cheaper the overall costs will be because you usually are healthier when you are younger and have few conditions.
You are also paying for a longer time and the company can use that money to cover yours and other expesnes. Some insurance policies can charge exorbitant amounts if you have any pre-existing conditions.
They will also charge you a lot more the older you are. Women will always pay less than men even if all factors are the same, in the US the average age of death for the mean is around 75 and 81 for women.
Be sure to do research if you are going to choose a plan, you can see some of your options no matter your conditions or residence in the states by going to policygenius.com
Life insurance vs burial insurance. What should you know?
There are a lot of differences between the two of these two types of insurance. But basically, life insurance covers all expenses including the burial and funeral.
While burial insurance just covers the funeral and burial. I have outlined what life insurance covers and doesn’t cover above.
Below I will highlight the main points of burial insurance.
- Usually purchased later in life and it is often marketed to the elderly as essential if they do not have life insurance.
- It is a death benefit package that the beneficiaries listed can use for any purpose unless stipulated by the policy or a will.
- Burial insurance does not require a medical exam, but if you want a better policy they will require one and you cannot be terminally ill.
- They are easy to get and you can buy the policy online or over the telephone.
- Burial insurances aren’t always worth the price you pay for them.
- Basic questions are asked are similar to life insurance what is their sex, age, tobacco user, and if they have any serious health conditions.
- They have a policy called guaranteed life insurance and this is for a person that cannot qualify for any other type of life insurance.
While this type of policy seems to be good to be true is that while it is not the worst option there are other ones out there that have similar costs and higher benefits.
Since you don’t have to have a medical exam you will be put in with a high-risk group of people and be treated as such. Even if you have existing health conditions don’t assume this is your only choice.
You may also find the following articles useful for planning for an economical funeral.