What is common practice? What does it usually cost? Should I be thinking about this?


3 Answers 3


My understanding of life insurance is that it usually provides some amount of money when the beneficiary dies. They don't divide the benefits into "funeral costs" and "all the rest". At least, mine doesn't seem to.

Also, a recent Wall Street Journal article on the casket-making industry noted

The average cost of a traditional burial is $7,200, compared with $1,400 for the crematory fee, some form of memorial service and an inexpensive urn, says John Ross, executive director of the Cremation Association of North America. (cite)

  • 5
    A standard cash emergency fund of 3-6 months expenses is the best source to cover funerary expenses and living expenses while mourning until the insurance company gets around to paying out.
    – SpecKK
    Aug 11, 2010 at 16:28
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    Having just recently suffered the loss of my wife, I can assure you that the figures cited above were vastly lower than my expenses. All in, it cost me a little under $17,000 for the service, cremation, and plot of land. The headstone will be another $5,000 - $10,000. Three months after the service, I do not yet have any life insurance or other benefits. Jul 29, 2011 at 14:50

It may also be important to check the policy for how long to process the payout and also how funeral homes expect to collect payment. All the life insurance in the world won't help funeral costs if it comes months after passing. I have no experience with this matter, but it's an aspect to consider.

  • 1
    Excellent point. I've helped family during a time like this and that's exactly how it played out: Funeral costs were due before life insurance had been settled and paid out. Credit came in handy. Mar 5, 2010 at 15:04
  • In my case, 50% of the funeral expenses were due the day we booked it (the day after my wife died). The other 50% within 14 days. I legally couldn't even apply for life insurance until this past week, three months after the death. Jul 29, 2011 at 14:51
  • In the US, many policies are sold especially to poor (and usually financially illiterate) people as funeral policies to cover funeral expenses. I suspect many of these policies pay off far later than when the money is needed the most. Apr 11, 2012 at 14:21

Another consideration is that the beneficiary of the life insurance policy may not be the person responsible for paying for the funeral. I'd expect the funeral expenses to come out of the estate of the deceased (if there are any assets there). The other answers regarding the likely timing of the expense vs the life insurance payout are very good as well. As @SpecKK said, an emergency fund is probably the best way to go.

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