The cost of funerals has increased nearly 30% over the past decade in Canada. The average price of a funeral can be a moving target, however, because it is heavily dependent upon the province in which you reside, as well as the funeral provider. Funerals can cost anywhere from $5,000 to upwards of $15,000 presenting a significant expense for a family to face when losing a loved one.
Final expenses are not exclusive to funeral costs. A person may leave behind outstanding bills, including lingering debts such as credit card, mortgages, medical fees, or unpaid taxes. Sometimes these expenses cannot be managed before death and will instead be left on the shoulders of your loved ones.
As you can imagine, if not planned for, these costs that are left behind can pose a significant financial burden to loved ones or family members. With the right life insurance policy, you can ensure that in the event of your untimely passing, your loved ones will receive a death benefit to cover these outstanding expenses and debts, sparing them the stress of scrambling to secure the funds on their own.
Below, we’re sharing what you need to know about final expenses and how to choose a best-fit life insurance policy that provides your loved ones with the financial support they will need during this emotional time.
Major Final Expenses to Consider
Costs can add up quickly, even for the most basic of funerals. The National Funeral Directors Association (NFDA) offers a breakdown of all the costs to consider when planning a funeral, whether you opt for a traditional burial or cremation:
| Funeral with Burial: | Funeral with Cremation: |
| ● Metal Casket
● Basic Services Fee ● Vault ● Embalming ● Facilities/Staff for Ceremony ● Facilities/Staff for Viewing ● Hearse ● Removal or Transfer of Remains ● Miscellaneous Preparation ● Printing for Memorial ● Service Vehicle(s) |
● Basic Services Fee
● Cremation Casket ● Embalming ● Facilities/Staff for Ceremony ● Facilities/Staff for Viewing ● Third-Party Cremation Fee ● Removal or Transfer of Remains ● Urn ● Miscellaneous Preparation ● Printing for Memorial ● Service Vehicle(s) |
How Can Life Insurance Cover Final Expenses?
Life Insurance is, at its core, a means for you to protect those you love from the stress and financial burden associated with your passing; in this sense, it is one of the greatest gifts that you can give a loved one.
By paying a monthly premium for a life insurance policy, you ensure that in the event of your passing, your loved ones receive a tax-free life insurance payout. This payout can not only cover funeral costs but may also help your surviving family members pay for other living expenses, childcare, tuition, or outstanding mortgage payments.
Understanding Your Life Insurance Options
It’s essential to weigh your options when deciding which life insurance policy will adequately cover your final expenses. Final Expense Insurance – also known as funeral insurance or burial insurance – is a great life insurance option if you’re looking for a plan designed to cover end-of-life expenses, such as your funeral exclusively. If you have broader coverage needs, or if your beneficiaries are young and dependent upon your income, you may opt for a more comprehensive life insurance plan. These plans will cover not only your end-of-life expenses (i.e., funeral or burial) but also long-term needs (i.e., tuition costs or mortgage payments).
Most life insurance options will allow you to choose between a term or permanent life insurance policy:
- Term Life Insurance plans offer coverage over a defined term period – typically 10, 20, or 30 years – with a premium that stays the same over this term. At the end of your term period, you can choose to renew your term, select a new term period, or switch to permanent coverage. Term life insurance plans offer affordable coverage that is ideal while your dependents are young or your debts are at their highest.
- Permanent Life Insurance plans offer lifetime coverage with a fixed premium that stays the same until the day you pass. Permanent life insurance plans tend to be a popular option for those within an older age bracket looking for coverage of their final expenses.
A life insurance advisor can work with you to help you select the best option based on your age, health, and how much life insurance coverage you need. Life insurance has come a long way, and now you can secure a reliable, affordable plan without the need for a medical exam, even if you have health issues or are hard to insure!
The loss of a loved one can be devastating, but planning to address the costs associated with your passing can go a long way towards easing the stress on those you leave behind.
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