What Can I Do About Dying Without Life Insurance?

Last Updated May 25, 2024

It’s unfortunate, but dying without life insurance can mean a mountain of debt and final expenses left in your wake.

With the current state of the American economy, most families are living paycheck to paycheck, and would struggle to recover from an emergency expense. 

If someone you loved died today, would you be able to produce upwards of $10,000 for their funeral and final expenses?

If you said no, this is where life insurance now comes into play.

For a surprisingly low monthly premium, you can ensure a comfortable future for you and your family.

Life insurance comes in many forms, and doesn’t have to be a scary or complicated process.

Let’s get right into it.

What Happens If You Die Without Life Insurance?

Your family will have to come up with the money to cover your final expenses themselves.

If this is not possible, your funeral will be paid for with any assets/estates owned by you before passing. 

Any outstanding debts will also be paid accordingly, and any money leftover will be distributed as your will dictates.

What Death Means To Most Americans

It probably comes as no surprise that Americans are prone to living paycheck to paycheck and that a surprise emergency expense of $10,000 would be completely unfathomable for most families.

Since 2013, the federal reserve has deduced that the average emergency expense is around $400. Now, this may have been true in 2013, but this number has not been adjusted for 2022 economic growth, as well as changes in the overall expenditure required of American culture. 




According to the lendingclub,
it’s in fact closer to $1,400 as of 2022. Nearly half of US consumers involved in the analytics have faced at least one unexpected expense within the last 90 days.

It’s also important to note that over half of those surveyed (56%), stated that the emergency expense was much larger than $400, and was actually much closer to $1,400

Spoiler: This is almost 3x the amount associated with emergency expenses according to the US government.

What About SSA? Will That Cover My Final Expenses?

the SSA death benefits given by the us government vs the actual cost of a funeral.

SSA pays a one-time lump death benefit payment of just $255, which is paid to the surviving spouse if they were living with the deceased. 


We’re pretty sure we know what you’re thinking, “What the heck am I going to do with $255?”  

$255 is laughable, and will maybe cover the urn used to store your cremated loved one, or potentially the flower arrangement you place on their grave site. 


There are other examples that may be useful,
such as survivor benefits, which exist as monthly payments made to those that have lost their loved ones in ways other than old age, although the restrictions are a lot harder to qualify for. 


Overall, if you can qualify, we recommend utilizing any social security benefits you can, but these aren’t going to cover all of your final expenses 99% of the time. 

What Living Paycheck to Paycheck Means For You and Your Family

americans that live paycheck to paycheckAlmost half of all the individuals in the US are currently living paycheck to paycheck, and this number is only increasing.

With higher and higher income tax brackets reporting that they too live paycheck to paycheck, it’s no wonder that emergency expenses are such a frightening occurrence for most people. 

In 2021, it was reported that those that earn $100,000 and above that live paycheck to paycheck has risen from 54% all the way up to 59%.

This is frankly concerning, and it’s that much more important to prepare as efficiently as you can for any unforeseen circumstances.

Funeral Costs In America In 2023

In 2023, inflation is not only affecting gas prices, but also funeral costs.


Depending on the state of residence,
a proper funeral tends to be between $7,000-$12,000, not including other costs such as burial, plot, and headstone costs.


So you can expect a mountain of expenses for your beneficiaries if you die without life insurance. 


This is not including cremation vs burial and how the price will change depending on your choices and the extravagance of such. 


Cremation
tends to be a lower cost alternative coming in between $2,000-$7,000 in the United States. The state in which you conduct your services will also have a different cremation cost and burial plot cost then another state.


For example
, when comparing burial plot cost prices from Alaska to California, you will see a wild difference in price between the two. Land, on average, is far more expensive in California than somewhere like Alaska.


Regardless of where the funeral is held, it’s important to consider the cost of cremation vs burial as this may also
wildly fluctuate.

There’s a plethora of factors to consider when adjusting for a traditional burial. 

Some examples include: 

Burial Caskets

Although specific to a traditional funeral service, Burial caskets can range greatly in price from each other,

with the low end potentially costing you as little as $50,

and the high end headed towards $3,000.

The big discrepancy in price comes from the fact that metal caskets can come in very extravagant forms, sometimes containing traces of gold/metal and embroidered with high-quality materials. 

The lower-end caskets forgo these features, sometimes even existing as a cardboard casket in the case of cremation caskets.

Service Fees

When hosting a funeral service, the contracting location has to support your funeral in a variety of ways. As a result, there are a few residual funeral home fees associated with the cost of burial. 

This fee may include labor costs, cost of the facility, paying staff, transportation, and even embalming in some cases.

When adding all of these fees together, the funeral home service fees can reach $3,000 considering all of the above are covered.

Embalming

Embalming, or the process of preserving the human body, is associated specifically with a memorial service. 

Within said memorial service, especially in the case of an open casket burial, the deceased body is preserved and made to look as presentable as possible.

Within this process, a specialized team is sent to address the diseased corpse in which they use a plethora of beauty tricks and techniques to create a presentable appearance. This is meant to serve those viewing as a fond reminder of what once was. 

The cost of this process can be up to $1,000 depending on the burial service and the extent of embalming required.

Burial Plot and Headstone

Depending on the state in which the cemetery is located, as well as the desired extravagance of the aforementioned burial, the price of a burial plot cost and accompanying headstone can be between $1,000-$4,000 for the plot, and up to $10,000 for the most expensive headstones.

Cremation

Although much lower than the average cost of a burial, cremation cost can also fluctuate wildly. 

Cremation cost is associated with similar factors to a burial, including the cost of viewing services, casket, urn, as well as the cremation process itself. 

The average cremation cost in America resides around $1,100 but can reach as high as $10,000 if the most expensive amenities are available. 

Overall, cremation is a more affordable option than a traditional burial.

The Impact On Your Friends & Family

First of all, funerals are not cheap in America

 

With costs reaching upwards of $11,000, it’s not plausible to be able to produce this amount of money with no notice. 

 

Unexpected circumstances can cause your family and friends to have to pay for these services out of pocket, and quickly too. 

 

Bodies in a traditional burial cannot be preserved for much longer than 5 days, unless cryo preservation or other services are utilized, so time is of the essence


Most of the time, friends/family of the deceased withdraw loans if they’re not able to produce these costs out of pocket or via a fundraising service, such as with a church.

How Does Debt Work After Death?

Debt tends to trickle down to your family, becoming their responsibility.

But, It depends on the circumstances surrounding the debt. 

For example, if the debt was jointly held, then the surviving member who entered the debt process with that person is responsible for any debts incurred thereafter. If there’s collateral attached to a debt, such as with a house that’s not completely financed, then the heirs or those directed by the will are responsible for the debt. 

If this isn’t possible, then the repossession process begins

What Are My Options?

Below are our personal picks for the best coverage regarding final expenses. These can all be used to provide your beneficiaries with the maximized amount of funds in the event of unforeseen circumstances.

Term Life Insurance

Term Life Insurance is another form of life insurance that offers coverage in terms, usually consisting of 10 year increments although five is also common. 

Term Life Insurance usually provides the largest amount of coverage, as well as the cheapest monthly premium relative to payout amount. As a result, this policy can require a medical examination to gauge your qualifications. 

This is the toughest policy to qualify for, and the most lucrative most of the time. Just keep in mind that term policies can sometimes expire with no option to renew or convert into permanent life coverage.

Whole Life Insurance

Whole Life Insurance, or also known as traditional life insurance, is a permanent form of life insurance that comes in multiple forms. 

The most common form of Whole Life Insurance involves a fixed premium as well as lifetime coverage in which payout will be received so long as premiums are paid

Whole Life Insurance’s payout contains a cash value that may be grown over time. 

In most cases, whole life insurance does not require you to fill out a questionnaire or undergo a medical exam. Final expense plans usually exist as a guaranteed whole life policy.

Final Expense Insurance

Final expense insurance is the type of insurance that’s in place to cover the funeral costs after your passing.

This is a type of coverage that you can apply for, and once you’re approved, your family will be entitled to the payout immediately, no matter how early or late your passing might be.

While final expense coverage is generally used to cover funeral/burial costs, one may use the funds in any way desired.

Final expense coverage usually exists as a simplified issue plan, meaning that you are approved regardless of any previous medical conditions, 99% of the time. The premiums are also generally low (depending on the condition of the applicant) and whole life, meaning that your rate does not change within the span of your lifetime. 

Additionally, these plans can coexist with Medicaid, depending on your total assets.

If said assets are too high to qualify, one may withdraw and use these funds to purchase additional coverage or what have you, maximizing your beneficiaries’ payout.

How Much Does Life Insurance Cost?

Company 50 y/o Male 50 y/o Female 60 y/o Male 60 y/o Female 70 y/o Male 70 y/o Female
$34
$27
$51
$40
$73
$58
$39
$34
$52
$41
$86
$65
$30
$24
$43
$32
$74
$53
$36
$30
$47
$37
$81
$60
$55
$38
$68
$53
$106
$80

These figures were obtained from the NFDA and are estimates only. For a detailed quote, please contact an agent. 

It may be surprising to some, but dying without life insurance doesn’t have to be expensive

It’s actually cheaper than most think, with premiums easily dipping below $50/month. 

Conclusion

Our infographic describing what happens if you die, and what you can do to prepare.

Overall, you don’t have to stress about how final expenses will be covered, as there’s a plethora of options for you to prepare for the future. 

These options also don’t incur a very high monthly premium nor do they require a lot of effort on your part, just a 5 minute phone call!

If you’re ever in need of resources, or of an agent to work on your behalf, then never hesitate to call us. We at Final Expense Benefits partner with over 20 carriers, with:


Being some of the ones that stand out among the crowd. Reduce the stress involved with life insurance for inmates and let us do all of the heavy lifting for you. 

Give us a call at 1(866)311-4338 M-F, 9-5.

Summary

  • Over 56% of emergency expenses exceed 400$, and are actually much closer to $1,400.
  • 43% of Americans live paycheck to paycheck and dying without life insurance can mean a mountain of debt.
  • Life Insurance can cover final expenses and then some, for a low monthly premium. 

Frequently Asked Questions

What Happens If You Die Without Life Insurance? / Dying Without Life Insurance?

This can potentially create a mountain of debt for your family, and a cycle of financial hardship.

Cremation vs Burial?

Cremation is the cheaper alternative, although burials are more traditional. 

What Can I Do About Emergency Expenses?

There are a lot of options for preparing for final expenses. You have life insurance options, survivor benefits, as well as investment accounts that may offer aid. 

Sources

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