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Dying With No Life Insurance
Life insurance is something you buy for yourself, but to benefit your loved ones. There is precious little you can control after you pass away, but whether or not you leave those closest to you with the provisions they may need is something you can plan for while you’re still alive.
Funeral Costs
Apart from trying to provide for your family, burial insurance and final expense life insurance is also about making sure your death isn’t a financial burden on the ones you love. The average cost of a funeral and burial can be somewhere between $3,000 and $25,000 – is that something you want others to have to pay for? If you die without life insurance, then someone else is going to have to pay for it.
What If There is Nobody Able to Pay for Your Funeral?
Being a financial inconvenience is one thing, being a financial impossibility is another. Not everyone has thousands of dollars on hand to pay for a relative’s funeral, especially when dealing with the unexpected. If you happen to die without ample life insurance to cover final expenses and your survivors do not have the financial means to pay for your funeral they may have to choose from among these sad alternatives:
- Get a loan.Your survivors will not only have to pay for your funeral, but also pay interest and damage their credit score in order to bury you.
- Ask the funeral home for a payment plan.This is similar to a loan in that it straps your relatives down with a monthly payment for a long time, but probably has little to no effect on your relative’s credit score.
- Release Your Body to The County Coroner’s Office. This means your body will be handed over to the government and they will be responsible for burying or cremating the body. Your survivors may have the option to retrieve the ashes (usually for a fee). If they do not, then your ashes will go into a common grave. If this is not a depressing way to finish your time on earth, then we don’t know what is!
- Contact Social Security Administration.If you have collected social security prior to dying, the social security administration may offer some assistance to your family when you pass away.
- Contact a Non-Profit Organization. There may be a non-profit organization that offers assistance to survivors. This normally depends on the circumstances of your death or other factors related to your life. For example, certain non-profits may offer help for the children of single parents, minorities, or so on.
- Start a Kickstarter Campaign. If you know a lot of people, your survivors may be able to crowdfund your funeral, such as using GoFundMe. By asking friends and family to contribute small amounts of money rather than sending flowers, your immediate survivors may be able to fund your funeral.
Other Expenses After You Die
When you leave this earth, funeral and burial costs are the most immediate expenses. However, if you die without life insurance, your survivors are likely to incur other expenses in the days and months to follow. Some of those expenses include:
Travel Expenses: It is unlikely that all of your important survivors live in the same city. Some of them may have to take a flight and stay for days in a hotel in order to be with loved ones during your funeral.
And perhaps your body needs to travel? Do you plan on being buried in the city, state, or country you currently live in? If not, you should plan ahead on how your body will be transported when you are dead.
Lost Wages: Believe it or not, your death will likely cause some heavy grieving. For most, it is difficult if not impossible to go back to work only a few days after such a traumatic loss. Your spouse or partner, for example, may take weeks if not months to gather up the mental and emotional strength to return back to office. It is unlikely that he/she will receive more than a few days of paid time leave.
Counseling: Processing your emotions and grief alone may be difficult, and sometimes professional help is required. While health insurance may cover counseling in some instances, it is not guaranteed. With most counseling sessions costing $100 or more an hour, it is likely that it may cost someone thousands of dollars to heal from your death.
Taxes and/or Debt: Depending on who you leave behind, that person may be responsible to pay any pending taxes or debt. If your survivors are still living in a house you own, they will likely owe some type of property tax, which they may not be prepared to do without selling the house.
Using life insurance for estate planning is typically a wise choice. It is one of the ten reasons whole life insurance is better than term life insurance. However, even if you do not have much of an estate to make plans for, be aware that your estate may be on the hook for any secured debt you owe. Your credit cards might go away but other debts, such as student loans, may continue even after you have died.
What If I Don’t Have Life Insurance?
If you don’t have life insurance, and your estate lacks the necessary funds, any and all of the above expenses may be a burden on your survivors. The loss of a loved one is a very difficult time, and by having made no preparations for your death, you will likely make it harder on your survivors. Many people assume life insurance serves the purpose of providing survivors with a cushy life after one’s death. The truth is, life insurance is to make sure your death and burial doesn’t financially bury your loved ones. By taking out a life insurance policy, you are making provisions for the inevitable, and your loved ones will be grateful that you took the time and energy to do so.
Lastly…
We’d like to acknowledge the fact that most people if given the choice would not choose to die without life insurance. After all, if life insurance were free, we would assume that most people would take it right?
But that’s the problem…
Life insurance isn’t free and what’s even worse is that in most cases particularly if you’re looking to purchase a Whole Life Insurance Policy or a Term Life Insurance Policy you’re also going to need to be able to “medically” qualify!