Life Insurance to Cover Funeral Costs

[easysurfer]

What is the logistics that's usually involved with life insurance to cover funeral costs? For example, let's say, there's a $30K life insurance policy and funeral costs costs $10K.

Would the insurance company just distribute 30K? Or would the insurance company distrubute 30K, plus to cost of funeral, in this example, an additional 10K?


Thanks.

 

[FreeAtLast]

My wife died 9 years ago with a 200k life policy. The insurance company just faxed the funeral director a "promise to pay document" for the amount of the funeral when I was making the arrangements, so there was no out of pocket on my part.

I got the check from the insurance company which was about 190k as the funeral cost was deducted. I am sure that they also sent a check to the funeral director for the 10k.

 

[easysurfer]

Thanks for the answer. Nice that at the time of grieving, you didn't have the extra stress of having to pay out of pocket.

 

[Alan]

My wife died 9 years ago with a 200k life policy. The insurance company just faxed the funeral director a "promise to pay document" for the amount of the funeral when I was making the arrangements, so there was no out of pocket on my part.

I got the check from the insurance company which was about 190k as the funeral cost was deducted. I am sure that they also sent a check to the funeral director for the 10k.

Same with us when my Dad passed away, insurance company paid funeral compnany directly, balance to the estate. (my sister was executor)

 

[easysurfer]

How much does a typical funeral cost nowadays? Is there a website (kind or morbid..I know) that shows typical prices? Visitation, showing, creamation. No burial.

 

[meierlde]

I really depends on if you want cremation or burial. (Burial is a lot more). A simple cremation would be in the 2-3k range, as noted a burial 8-10k plus the cost of the plot. The 2k example included no visitation or mortuary involvement in the memorial service.

 

[easysurfer]

Thanks for the ballpark amounts. It helps in my thinking.

The reason I have these questions is my friend (I've mentioned her before in other posts) that I try to help out, is in very ill health and the issue about life insurance, funeral, etc. comes up now.

 

[misanman]

Just went thru this with MIL. Cost for traditional funeral was $4k not including plot or marker. Costs actually came down $1k from identical services for FIL 12 years ago. Made me think that prepaid might not be that great a deal.

 

[Buckeye]

It was $0 for my deceased MIL to be cremated as she took a detour through the University of Cincinnati medical school, i.e. she donated her body to science. Her ashes were returned to my BIL this summer which was about 2 years after her death. He took her back east and sprinkled her in places she lived and loved. Exactly as she wanted.

 

[sn2792]

I spent $3200.00 when my Mom passed away in February. This was for a cremation and a memorial service. I didn't show her, but had a poster with pictures. It also cost around $400.00 to have the obit in the newspaper for 2 days.

 

[Khan]

It was $0 for my deceased MIL to be cremated as she took a detour through the University of Cincinnati medical school, i.e. she donated her body to science. Her ashes were returned to my BIL this summer which was about 2 years after her death. He took her back east and sprinkled her in places she lived and loved. Exactly as she wanted.

I've donated my body to the local medical school; Mother did so also.

 

[travelover]

I've donated my body to the local medical school; Mother did so also.

She donated your body?

 

[grumpy]

My FIL passed away last year. His wife had passed earlier and they had plots already paid for. FIL had told us that funeral arrangements were all taken care of. Went to the funeral home to make final arrangements. Were shown paperwork that indicated that Dad had made down payment of $1000 on funeral but then failed to follow through with paying the balance, despite at least three letters sent to him by the funeral home.

The bottom line was, we had to write a check from our own account for $8700 on the spot (later reimbursed from his estate).

 

[chinaco]

I used a trust at a local funeral home to prepay for my Mother's funeral while she was still alive. I think they had to purchase an insurance policy with the funds. It all worked out... but this arrangement was made when she was using hospice. It was not like paying for something 25 or 30 years in the future.

I just began looking into all of the alternatives for DW and I.

I am a little wary of giving money to the funeral home directly to be put in some sort of escrow or trust for an event that could be 30+ years away. I am leaning toward a couple of small life insurance policies with a large and highly rated insurance company.

I plan to make some sort of decision in the next year... but still have to do more research.

I would be interested in hearing how others have approached this type of preparation for themselves..

 

[ERD50]

?

Why insure for a ~ $10,000 - $30,000 (or whatever) expense? Unless this is a very significant portion of your net worth. Why not just pay it when the time comes (this is separate from pre-arranging, making decisions, etc).

Do you all buy 'I need to buy a new car insurance', or 'new roof insurance'? I don't get it.


-ERD50

 

[Khan]

She donated your body?

Mother donated her own body; from what little contact I've had with family it seems it was followed through.

 

[Khan]

"Shove a bone up my *** and have a dog drag me into the woods."
---quote from a relative

 

[travelover]

Mother donated her own body; from what little contact I've had with family it seems it was followed through.

I'm pulling your leg. My mom also gave her body to a medical school.

 

[GregLee]

I've donated my body to the local medical school; Mother did so also.

She donated your body?

The interpretation of "did so" raises an interesting grammatical issue, which (as I understand it) I am precluded from commenting on here.

 

[brewer12345]

The interpretation of "did so" raises an interesting grammatical issue, which (as I understand it) I am precluded from commenting on here.

Oh, please do. We all await your wisdom much as trapped miners await a rescuer.

 

[growing_older]

Oh, please do. We all await your wisdom much as trapped miners await a rescuer.

But wait. Does this mean "please do so" as in make a comment.

Or does the mean "please do so" as in be precluded.

Can we please have a conversation about the grammar in this conversation about grammar.

 

[chinaco]

?

Why insure for a ~ $10,000 - $30,000 (or whatever) expense? Unless this is a very significant portion of your net worth. Why not just pay it when the time comes (this is separate from pre-arranging, making decisions, etc).

Do you all buy 'I need to buy a new car insurance', or 'new roof insurance'? I don't get it.


-ERD50

You can do a few internet searches and get information on it.

One thing that sometimes comes as a shock... some insurance contract are used for more than just the basic insurance part. It is a financial contract with a strictly monitored and regulated company. They are watched. Plus insurance companies have the competency to manage those types of funds over decades (that is what they do)! The alternatives seem to a Bank and their trust dept. Or a trust with some other entity like a funeral home. If someone prepays at a funeral home... I think most of them use a trust... some just go and buy an insurance policy themselves. I am not sure of all of the details yet... still looking into it.

It seems to be a fairly common practice to make sure funds are reserved, ready and available to pay for the funeral expenses. Especially if one is using a Will and executor. But, there are other options (trusts).

I want to make it easier on our executor to get the money for the funeral without having to run to court immediately.

If you have ever done that job... you know what I am talking about.

Since the Estate Tax laws may change soon and due to our financial situation... I may switch from using the beneficiary on accounts and a Will to transfer the estate using some sort of Trust. That might change my approach to the problem. But I need to visit our estate attorney to discuss it.

Just looking into my options.

 

[Badger]

My parents took care of all their arrangements in advance (plots, vaults, caskets, and all the funeral home and church expenses) except for flowers. This was a nice gift for us children when the times came. The funeral home was first class in taking care of everything on both occasions. I was so impressed as well as relieved of the burden at a time when I would have not been in the frame of mind to effectively deal with the details that my wife and I bought plots, etc. at the same cemetary. We are now in the process of making all the arrangements at the same funeral home. Like my parents did for us I don't want our children having to make arrangements when our time comes. If I go first I don't want the added stress for my wife and if she goes first I don't think I will be in any condition to function mentally for a long time.
The cost is minimal compared to the peace of mind for us as well as in the future for our children.

Cheers!