Funerals can be costly, and seniors on a fixed income often worry about how their families will afford them when they pass away. According to the National Funeral Directors Association (NFDA), the median cost of a funeral with a burial is $7,640, while the median cost of a funeral with cremation is $6,260. In this article, we’ll provide a step-by-step guide for seniors on a fixed income to calculate how much life insurance coverage they need to cover funeral costs.
Factors that Impact Funeral Costs
Funeral costs can vary widely depending on several factors, including:
- Location
- Type of funeral or cremation
- Funeral goods and services
- Cemetery plot or cremation fees
- Additional fees and charges
How to Calculate Life Insurance Coverage Needed for Funeral Costs
Here’s a step-by-step process to calculate how much life insurance coverage you need to pay for your funeral costs:
Step 1: Determine Your Preferred Type of Funeral or Cremation Service
The first step in calculating life insurance coverage is to decide what type of funeral or cremation service you prefer. Traditional funeral services, for instance, tend to be more expensive than direct cremation options. It’s important to consider this when estimating your final expenses. The type of service you choose may be Traditional Funeral Service, Direct Burial, Direct Cremation, Memorial Service, or a Green Burial.
Step 2: Identify Additional Costs and Fees
Aside from the cost of the type of service, there are additional fees to be considered, such as transportation, flowers, and obituary fees, among others. These fees may include burial or cremation plots, graveside service costs, and any other related expenses.
Step 3: Research the Average Funeral Costs in Your Area
Research the cost of a funeral in your local area by contacting various funeral homes and getting free quotes. You should ask about the cost breakdown of various aspects of the funeral and pay attention to the total cost.
Step 4: Determine How Much Life Insurance Coverage You Need
After determining the average cost of the funeral in your area, choose a policy with enough coverage to cover your final expense costs. The policy should cover the average cost of the funeral and necessary additional fees.
Tips for Saving on Funeral Costs
If you’re looking to save money on funeral costs, consider some of the following tips:
Pre-plan Your Funeral and Pre-pay for Your Funeral Expenses
Pre-planning and pre-paying for your funeral expenses will help you save money while ensuring that your final expenses are covered. This eliminates the additional costs associated with inflation, unnecessary add-ons, and interest from loans.
Opt for Simple Funeral Options
Simple funeral options such as direct cremation or graveside services can help reduce funeral costs. You can also purchase an affordable casket and funeral container to reduce costs.
Explore Government Assistance Programs
Finally, look into government assistance programs for funerals, such as Social Security and Veterans’ benefits, among others. These programs can help cover a portion of your funeral expenses.
It’s important for seniors on a fixed income to have adequate life insurance or final expense insurance coverage for their funeral expenses. With proper research, planning, and budgeting, you can ensure that your final expenses are covered while avoiding a financial burden for your loved ones.
Click here to learn more about the different types of life insurance policies and the final expense/burial insurance options you can choose from.
