Losing someone you love is a painful experience especially if you don’t know how to pay for a funeral without life insurance. Dealing with the weight of financial burden makes the experience even more difficult.
Dying without life insurance is a serious matter. Think about what will your family do when faced with that situation. They are not only crying about losing a loved one but thinking where in heaven’s name will they come up with the money for the funeral.
Funeral services are expensive. The National Funeral Directors Association estimates the average cost of a funeral today with viewing and burial is $8,755. While funeral with viewing and cremation is expected to be $6,260. If you have no cash resources, paying for a funeral can put your family into crisis.
If you become responsible for making funeral arrangement for your loved one without life insurance or burial insurance policy, and you have little means to pay for a funeral, you need to seek ways to come up with the money to pay the funeral cost. There are significant ways you can pay for the funeral without life insurance. We will explore your options in this article.
HOW TO PAY FOR FUNERAL WITHOUT LIFE INSURANCE
What will you do if there is no money for a funeral? If you lack the resources for a funeral, here are several ways that a funeral can be paid for even when the family is short of necessary funds:
Personal loans can be used for funeral cost. You will need to apply for a personal loan if you have good credit and feel that you can comfortably pay off the loan in the next three to seven years.
You can get a loan for a funeral from banks, credit unions, and specialized lenders. Interest rates range from 16% to 35% on funeral loans.
Personal loan for a funeral can be unsecured, hard to get and expensive. You will not only have to pay for the funeral but also pay interest on the loan, and it may damage your credit score to bury your loved one.
Credit Card Payment
Yes. You can pay for a funeral with a credit card. It is another financing option to help you pay the funeral costs. The best way for you to do this is to use a zero percent introductory rate credit card. These cards allow the user to pay off the balance without paying any interest for a set period of time.
This introductory period can last anywhere from six months to 21 months or more. After the period ends, you’ll begin paying interest – you need to be aware that the rates could be very high (up to 25% interest or more). So, you have to pay the card in full before the introductory period is over so you won’t need to pay any interest at all.
Ask For Contributions
Instead of shouldering the cost of a funeral all by yourself, try asking friends and family to contribute. Determine first how much the funeral and burial will cost. Ask family members to divide the amount between yourselves. If you were able to keep the costs down, you could split this amount to make it more realistic to meet the funeral expense.
Get the family together and plan the funeral so that the overall budget fits into each person’s share.
Splitting the bill among the family may help make the cost more bearable so that no one person is left paying for the whole funeral.
Ask The Funeral Director For A Payment Plan
This is similar to a loan, but your relatives will have to pay the funeral home instead of a lending company. You may need to make a monthly payment for a long time, but this does not affect your credit score.
You can ask the Funeral Home to finance all or part of the total funeral cost. You need to carefully check the terms of the funeral financing agreement to be certain. Loan amount between $1,000 and $10,000 has interest rates of around 15-25% and the terms of up to 36 months.
Contact Social Security Administration
If you have collected Social Security before your death, the Social Security Administration may offer some assistance to your family.
There is a $255 lump sum Social Security death benefit to those who will qualify. Eligible surviving spouse or children of someone receiving Social Security benefits can receive the death benefit to help pay for funeral costs.
Contact the Social Security Administration office as soon as possible. Usually, the funeral director will report the death but you need to furnish the decedent’s Social Security number for him to make the report.
Contact a Non-profit Organization
There are non-profit organizations that offer assistance to survivors. These organization may have assistance programs to help pay up the funeral cost of someone who doesn’t have the money for funeral expenses or if that person’s family or friends are unable to pay.
Start a Kickstarter Fundraising Campaign
You may be able to crowdfund the funeral on GoFundMe.com or Kickstarter.com if you know a lot of people. By requesting family and friends to contribute a small amount of money rather than giving flowers, your immediate family may be able to fund your funeral.
Crowdfunding sites make fundraising easy by giving you a platform to tell everyone – family, friends, and stranger everywhere your story and how you’re struggling to pay the cost of your loved one’s funeral.
These donation platforms often take a percentage of the funds donated so you will not get all of the money that is donated.
Funds Within The Deceased’s Estate
Funds within the estate are subject to Probate, and it can take time to release funds (often many years). But, a funeral home may be willing to negotiate with you if you can provide proof that there are funds in the deceased estate and the funeral costs are well-covered.
Payable-On-Death Account or Totten Trust
POD is a bank account that allows you to save for your funeral and name a beneficiary who can get access to your money when you die.
They just need to present a death certificate to the bank, and they can get the money on the spot. This money isn’t needed to go through probate, and it’s available right away to pay for your funeral expenses.
The disadvantage of this method is that many people lack the discipline required over many years to accumulate enough for a funeral.
If your loved one were in the military, they are entitled to free burial in a national cemetery. There’s no charge for a gravesite, marker, vault, opening, and closing of the grave. The Veterans Administration office will pay a burial allowance to your family to cover other funeral expenses. And the VA will pay a sum toward a burial plot elsewhere if you are not buried in a national cemetery.
Employer or Union Benefits
You may need to check what employee benefits your deceased loved one had. Sometimes there is employee or Union benefits package that provides some assistance with funeral cost.
Accident Compensation or Victim Compensation Program
If your loved one was involved in an accident or was a victim of a crime, you can look for some assistance. If he died in a vehicular accident, there is a possibility that the auto insurance will cover part, if not all the funeral cost.
Check the no-fault coverage and accidental death clause of the insurance to see if they will pay for at least some of the funeral expense.
Inquire About Federal-State Assistance
If you can’t get the money together to pay for the funeral costs, it’s possible to get some help from the government.
Some states may pay small amounts toward a funeral for people who are disabled or on Medicaid or are indigent. Some states have victim compensation program to help pay for funeral expenses for driving under the influence or murder victim.
Indigent Burial Assistance Programs
There are also Indigent Burial Assistance Programs offered by many counties across the United States. These programs are funded and operated to help those neediest or destitute ensure their disposition is taken care of. The state would arrange simple pauper burials in a designated area of a municipal cemetery. Today, they offer direct cremation as a low-cost solution to dispose of the dead.
If your family member who passed away was on some type of government assistance, there is a good chance that they will qualify for the indigent burial. The state will pay part or all the cost, and you may be eligible for cash assistance. Contact your nearest Human Services office to find out the details and apply.
HOW TO KEEP THE FUNERAL COST DOWN
The most important thing for you to do if paying for a loved one’s funeral is an issue is to keep the funeral costs as low as possible. Come up with a budget and stick to it.
Many of the costs can drop with a little planning. That can be hard to do while grieving but you should remember that you can still have a dignified funeral service without having to spend thousands of dollars.
Consider cremation as an option, and this can keep the costs down. Cremation is cheaper than an open funeral. The average cost of cremation is around $1,650-$3,000, which includes a memorial service. The average cremation cost without the memorial service is only $750-$2,000. Pricing depends on your geographic location.
If you choose cremation the service could be held outside the funeral home like the church, a park, or another no or low-cost venue, you don’t have to pay for a funeral venue.
It is also a good idea to be upfront with the funeral director about your finances. If you’re low on funds, the funeral director will guide you to inexpensive alternatives.
The funeral service doesn’t have to be expensive. Make sure to shop around and compare funeral costs. Enlist the help of a friend or a relative to help you negotiate the best price.
THE IMPORTANCE OF BURIAL INSURANCE
Have you ever thought what would happen if you die with no life insurance and your family doesn’t have the means to bury you? Pitiful isn’t it? Having made no preparation for your demise will likely make it harder on your family.
Burial insurance and final expense life insurance will make sure your death isn’t a financial burden on your loved ones.
The funeral cost run between $3,000 and $25,000 – is that something you want your family to pay for? If you die without life insurance, your family is going to have to pay for it.
Life insurance is something you buy when you’re still alive but will benefit your family when you pass away. Life insurance will make sure your death and funeral don’t bury your family in debt. By taking out a life insurance policy, you are making provisions for the future, and your family would be grateful you took the time to do so.
BENEFITS OF BURIAL INSURANCE
These policies include cash value components that build up tax-deferred savings. You can withdraw these funds or borrow against the policy if you have the need.
Ease of issue. Easy to qualify and get insurance coverage. No medical exam needed, you are only required to answer a few health questions.
Level premium. Your premium will never increase. It is lock into a rate at your current age, and the rate will never go up regardless of advancing age or medical conditions.
Fixed death benefit. Your death benefit is fixed and guaranteed to never decrease for any reason.
Tax-free. The death benefit amount is paid to your beneficiary tax-free.
Not cancelable. Your policy can never be canceled by the life insurance company as long as premium payments are made on time.
Cash value builds up. Burial insurance is whole life policies that build cash value over time.
You can get a much smaller amount of coverage. Burial insurance can range from $1,000 to $50,000
WHERE TO FIND THE BEST BURIAL INSURANCE
If you decided that you want peace of mind that a burial insurance policy can provide to ensure your family will not be left with the burden of unpaid funeral expenses, you could call us at (888) 862-9456. We can find and secure the right policy for you.
At Funeral Funds, we specialize in helping people find affordable burial insurance. We work with the A-rated insurance companies that can provide you the best-priced burial insurance plans.
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