The cost of a traditional funeral ranges between $7,000 and $12,000, including basic service fees, a casket, viewing and burial, and other preparation. With the cost of funerals steadily rising, thinking about how to secure funds for your funeral can help you avoid sending your loved ones into a financial disaster.
If you're planning to set aside money in your will, it's important to keep in mind that your survivors won't be able to access your wealth until the court probates your estate, which can take a few months to a year. In most cases, funeral homes ask for full payment upfront, meaning your survivors may risk debt when paying for your funeral. Instead, here's how selling your life insurance policy can help you cover the cost of your funeral.
What is a life settlement?
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If you're covered under a life insurance policy, you can sell your policy to a buyer in return for a lump-sum payment. When you sell your life insurance policy to a life settlement company or life settlement broker, they take over paying the monthly premiums on your policy to keep it in place.
Depending on your financial situation, selling your life insurance policy may be able to help you cover the costs of your funeral and provide financial assistance to your loved ones after your death.
How can I sell my life insurance policy?
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To qualify for a life settlement, the face value of your policy must be at least $100,00 and you must be at least 70 years of age. If you're not sure how much your life insurance policy is worth, contact your insurance company and speak to an agent.
If you're suffering from a terminal illness or have a reduced life expectancy, you may qualify for a viatical settlement. Life insurance policyholders with terminal illnesses such as Alzheimer's or cancer do not need to meet an age requirement to qualify for a viatical settlement. To find out more about how a viatical settlement can give you financial peace of mind, Google “what is a viatical settlement“ or visit the American Life Fund to see if your policy qualifies.
How much should I set aside for my funeral?
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Depending on whether you're planning to be buried or cremated, funerals can cost up to $9,000 or more. In some cases, caskets and urns can cost thousands of dollars or more, depending on the style and material. Calculating the cost of your funeral beforehand can give you peace of mind and help you set aside enough to help your loved ones pay for funeral expenses.
If you're planning your funeral with a budget in mind, remember that add-ons can add thousands of dollars to the overall cost. To obtain a general idea of how much you'll be spending, shop around for funeral services and add-ons you want by contacting local funeral homes and asking for quotes. Although most consumers don't shop around for funeral services, it can help you understand your options before making any major purchases.
How can I save money on my funeral?
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In addition to shopping around, purchasing funeral items—like caskets and liners—from a third-party can help you cut costs. By comparing prices and purchasing items through a third party, you can reduce the cost of your funeral by thousands of dollars without sacrificing the integrity of your arrangement. To further reduce costs, consider skipping embalming or hosting memorial services at a private home.
Cremation can also help you save on funeral costs. With Legacy Cremation, a trusted cremation provider, the costs of transportation, certified copies of the death certificate, cremation approval, and assistance in filing for VA benefits are included in the cost of a cremation package. The professionals at Legacy Cremation can also help you plan a unique and meaningful ceremony to honor your life.
All in all, selling your life insurance policy for a lump-sum payment can help you gain financial peace of mind, cover the cost of your funeral, and provide for your loved ones after your death.