Death and Funerals: Money Management for Mortuary Affairs

Photo: Getty Images

Planning for the future is a daunting task, especially when that planning is in regards to a time where you or a loved one is no longer around. The costs associated with funerals is an expensive affair, however, there are ways in which you can mitigate expenses.

The primary way to cover the expenses associated with a funeral is through a life insurance plan. Life insurance plans come in a variety of plans but the main idea behind them is to provide some sort of compensation after a loved one dies. These plans are either listed as term, whole, or universal life insurance. Fidelity Investments suggests that individuals who are looking to invest in life insurance must consider the needs of those they are leaving behind and the intent for the amount in assets the deceased is leaving behind for loved ones. Remember, life insurance is money that the beneficiary can do with as they wish. They do not necessarily have to utilize those benefits to pay for the funeral. It could be used to pay off mortgage or debts possibly incurred during life which would need to be paid off if that individual could not make the payments.

Photo: J. Verma

Knowing your own situation is tantamount when pursuing life insurance. If you are looking to cover costs that may occur during the prime of your working life while contributing the smallest possible endowment then investing in term life insurance will work for you. This plan covers terms between 20 and 30 years and can be continued after the expiration of the term, but at a higher premium.  

If you wish to ensure your loved ones are taken care regardless of when you die then whole or universal life insurance is the proper path. The difference between these two plans is that universal coverage is flexible and benefits can change as you deem necessary, whole life insurance is fixed and benefits are stationary. Regardless, both of these plans have higher premiums which will require greater investment by you.

The last important thing to note is when to start a life insurance policy. If you begin at an early age then the rates will be lower if you start later in life. In fact, starting your children or yourself while still in your twenties will normally guarantee a much lower premium based on mortality rates.  In conclusion to this series, the best way to prepare for death is to get ready for it at a young age to ensure your future loved ones will not suffer with debt and estate sales when you pass on from this mortal realm.