Resolve to be Prepared
Proper planning will make things easier for your loved ones.
HAPPY NEW YEAR and welcome 2017!
This is the time of year for resolutions. According to Nielsen surveys, the most popular New Year’s resolutions are to get in better physical shape and lose weight. But, most such resolutions are short-lived, and people typically revert to old habits within one month. The third most popular resolution is the easiest to maintain: to not make resolutions at all.
You have to go pretty far down the list of resolutions before coming across ones that involve getting in better financial shape or taking some time to properly plan for your and your loved ones’ financial future.
In 2016, we all lost friends, relatives and loved ones. Recently, one of my associates attended the funeral of a close friend, and she told me how shocked the family was at the total cost of the funeral. She recommended I write a column regarding the preparation and costs associated with your average funeral.
So, in the spirit of helping our members “resolve” to make better plans in the coming year, I’d like to share some interesting data with you.
Many times you’ll hear people say that the average funeral costs around $6,000. That estimate, however, is typically based on old figures. Basic funerals today typically cost anywhere between $8,000 and $12,000 and like everything else, the costs go up annually due to inflation. While cremation is gaining in popularity, the traditional funeral is still the most popular choice.
I lost my mother-in-law last year. Her instructions included a request for a simple cremation rather than a traditional funeral. She was very proud of the fact that she had purchased a “pre-paid” plan and always told us that “everything was taken care of.” After she passed away, the funeral director told us her plan was valid only at that particular funeral home, which was in Florida where she had resided for many years. She purchased the plan there before returning home to New York to live out her last years with family. After tallying all the fees and other costs related to the funeral, our expenses exceeded $7,000 – not including the cost of hotel rooms and meals while the family was there. We did, however, (after a lot of screaming and yelling) receive a small refund of the premiums she pre-paid to the funeral home in Florida. That was one great learning experience for us all.
While it’s important to realize that costs can vary considerably between funeral homes and geographical areas of the country, here’s a ballpark estimate of the main costs associated with a funeral today:
• Funeral director’s services – $1,500
• Casket – $2,300
• Embalming – $500
• Funeral home services (viewing) – $500 to $1,500
• Grave site – $1,000 to $2,000
• Grave site services – $600
• Grave liner/container – $1,000
• Headstone – $1,000 to $1,500
In this example, total costs would be between $8,400 and $10,900, and that’s just for the main items. There are additional charges for things like flowers, clergy, musicians, a post-funeral reception or dinner, and placing an obituary in the local newspaper. There are also costs that many don’t anticipate, such as travel, meals and (possibly) hotel rooms for out-of-town family and guests.
Speaking again from personal experience, I lost my mother four years ago. She passed away in Florida but wanted to be buried in the Pittsburgh area. Our entire family flew to Florida to be with her when she passed; then we held services in Florida before having her transported back to Pittsburgh, where we again held services and the actual funeral. Although this isn’t the norm, that experience is not uncommon and certainly illustrates how additional expenses can be incurred when your family is spread out like ours was.
Here at William Penn Association, we are often asked if we have a type of certificate that is commonly referred to as a “final expense” or “burial” policy that will provide additional assets to help offset the cost of the funeral, or final expenses. While “final expense” type policies come in various shapes and sizes, one thing they all have in common is that they are actually life insurance policies.
Some companies issue final expense policies in which the insured must survive for a period of two years before receiving the full benefit. These are typically called “graded benefit” policies, in that the benefit is “graded” upwards to the full value, typically after a two-year period. These types of plans offer a reduced benefit during the first two years, but I have seen some that offer nothing more than a refund of premiums should the insured die before the expiration of the two-year period.
If you or a loved one find yourself searching for this type of policy, I’d first consider a plan that is “fully underwritten,” or is a true “guaranteed issue” contract, that pays 100 percent of the death benefit from day one.
One of WPA’s most popular choices for a “final expense” type of coverage is known as our Ordinary Life Senior Special. This plan was designed for seniors that are in generally good health, with standard risks accepted through Table 4. This means that you don’t need to be 100 percent healthy, and we consider applicants who may have diabetes, high blood pressure, build issues or many other ailments that could cause you to be less than a standard risk. Please see the chart below to see how much coverage you may qualify to receive whether paying $200 or $400 per year. It’s also important to realize that smokers and non-smokers pay the same rates under this program. You can also pay your premiums monthly, quarterly or twice a year.
Your WPA agent or broker can help you determine if this type of policy fits your needs, and can help determine if you qualify based on a few simple questions. Don’t have an agent or broker currently assigned to your account? Please call our Sales Department at the Home Office at 1-800-848-7366 to have your questions answered or to have an agent assigned to you. We’re always here to help!
From Bob and Laurin in the Sales Department, we wish all of our members a safe, happy and prosperous New Year!