How to Financially Prepare for End-of-Life Expenses

Posted by Bill Bruce on Nov 25, 2019 2:45:00 PM


In order to successfully prepare for the future, there are several things to consider when it comes to your financial plans. Make sure your family is protected against potential financial obligations by preparing for your end-of-life expenses. 


What are end-of-life expenses?

End-of-life expenses are all the bills that your loved ones will incur related to your death. These include not just funeral expenses and burial or cremation costs but also out-of-pocket medical expenses, travel costs for family members, the cost of a wake or other celebration of life that may follow the funeral, and some types of outstanding debt. Because this can create a substantial burden for loved ones, many people choose to purchase some type of life insurance to protect their family members.


What types of coverage are available for end-of-life expenses?


Term Life

At some stages of life, term life insurance can be a cost-effective way of protecting your family in the event that you die earlier than expected. Many people purchase term life insurance when they get married or are expecting their first child as a way to protect their immediate family from the loss of their income and other contributions to the household. Level term life policies offer a flat rate for a set period of years (the “term”) and are typically very affordable for young, healthy individuals. Term life insurance, however, can become very expensive or impossible to obtain as you get older. As a result, people in their 50s or older are often better served by other options.



Some people are financially comfortable enough to set aside sufficient funds to leave to their families to cover their expected end-of-life expenses. End-of-life expenses can be unpredictable, however, so if you decide to use this option, be sure to allocate enough to cover unexpected costs. 

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Preneed Insurance

With preneed insurance, you make the arrangements of your choice with the funeral home, and the insurance policy covers all of the associated costs. The premium is paid directly to the insurance company, normally based upon an amount that’s determined by the goods and services you select. This is an attractive choice for many people because they want to relieve their loved ones of the burden of planning and paying the costs associated with a funeral service and cremation or burial. Knowing that your loved ones are cared for and can use the time following your death to simply mourn and remember can be a great comfort. Keep in mind, however, that a preneed policy covers only the prearranged funeral costs and not all of the other expenses mentioned above.


Final Expense Insurance

Final expense insurance offers more flexibility than preneed insurance because it can be used to cover any and all expenses your heirs incur at the end of your life. Your beneficiaries receive the death benefit of your policy and can use it as they wish. So, if you want to enable them to have a big party in your memory, take a family trip to scatter your ashes, or pay off debt that you leave behind, a final expense policy may be a sound choice.


Final Expense Coverage from ELCO

ELCO Mutual offers final expense coverage at competitive premiums. ELCO’s final expense insurance is unique as it is one of the only final expense policies that is participating, meaning the benefit amount can grow over time by utilizing non-guaranteed dividends. To purchase this policy, you must be at least 50 years old. Both immediate and modified benefits are available in amounts ranging from $2,500 to $35,000, depending on age and other qualifying factors.


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Topics: Term Insurance, Final Expense, Preneed Insurance