Does Social Security Cover the Cost of My Funeral?
We spend our whole lives planning for our future, but many of us don’t prepare for our passing. It’s not really what any of us want to think about, but eventually, we will die, and there will be a funeral. Funerals aren’t free, nor are they cheap. The average cost of a funeral these days is around $10,000.
Losing a loved one is hard, and no one wants to add to that by leaving a financial burden. Some strategic planning on your part will make sure your arrangements are taken care of, so your family doesn’t have to worry about paying for your funeral expenses.
So, why does a funeral cost so much, and does Medicare or Social Security cover any of those costs?
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Why Do Funerals Cost So Much?
Unless you’ve planned a funeral, you probably aren’t sure what the costs include. Here’s a breakdown of funeral expenses with a brief explanation of each.
1. Funeral home
- Use of the funeral home for viewing and ceremony: $595-$915
- A “basic services” fee: $1,800-$2,000
2. Removal and transfer of remains
- Transporting the deceased: $320-$725 (international transfer can run $5,000-$8,500)
3. Embalming and other preparations
- Body embalming: around $695
- Other body preparations: around $250
4. Hearse and car services
- Hearse: $275-$32
- Service car: $125-$145
5. Cemetery/Burial plot
- Public cemetery plot: $200-$2,000
- Private cemetery plot: $2,000-$25,000
6. Casket and burial vault
- Casket liner: $700-$1,000
- Burial vault: $900-$13,000
- Casket: $2,000-$10,000 (Elaborate caskets can cost $35,000 or more)
- $1,500-$3,000 if done through a crematory
- $2,000-$4,000 if done through the funeral home
- Single floral arrangements: $50-$80
- Floral tributes or wreath: $100 or more
- Casket sprays: more than $700
9. Catering/Food: this is often done through your church or friends, but if not, it can cost several hundred dollars to feed everyone
10. Obituaries: if not included in the funeral home basic fees, it runs $200-$500
11. Gravestone/Grave marker
- Grave markers: $95-$1,000
- Upright stones: $1,000-$10,000
With all these expenses added together, you can reach or even exceed $10,000 in a hurry. Planning for a way to cover these expenses so your loved ones don’t have to is paramount.
Does Medicare or Social Security Pay for Funeral Expenses?
The short answer to this question is no; they don’t. Medicare covers medical care, which ends when you die. Medicare doesn’t have a death benefit either, but Social Security does offer survivor benefits.
The Social Security Administration will give a one-time $255 payment to a surviving spouse or child, called a special lump-sum death payment.
You do have meet certain requirements:
- The spouse must have been living with the deceased or receiving certain social security benefits on the deceased’s record.
- If there’s no surviving spouse, the payment goes to a child eligible for benefits on the deceased’s record in the month of death.
After seeing how much a funeral can cost, you realize that $255 from Social Security is a nice gesture, but it will only cover a few floral arrangements.
6 Ways to Help Cover the Cost of Your Funeral
We have six ways to help you cover your final bill. We think some are better than others, but each one has its benefits, and depending on our circumstances, it could be the right fit for you.
Most funeral homes want to be paid upfront, so leaving arrangements through your will isn’t ideal. Your family will have to pay for the expenses and wait for probate to reimburse them, which could take months or even years, depending on the circumstance and legalities.
There are a few different kinds of insurance that can help your family cover the costs of your funeral.
The first is regular life insurance. Many life insurance policies will pay a lump sum to your beneficiary to use for your funeral and any other financial needs for your family.
The second is called final expense insurance. It’s also referred to as a burial policy, a final expense plan, or burial insurance. It pays out to your beneficiary to cover:
- your funeral and burial expenses
- any outstanding healthcare bills
- outstanding debt
- ongoing household expenses
- legal fees
- travel expenses for those coming to your funeral
The final option is called pre-need insurance. This is a policy that’s intended to cover a predetermined amount for your funeral. We don’t recommend or offer this insurance, because the premiums can end up being more than the final payout, and the predetermined funeral amount isn’t always enough to cover all the current costs.
2. Savings Account
Set up a joint savings account with a family member or loved one who will handle your funeral arrangements and give them rights of survivorship. This will provide them with immediate access to your money once you die. They can follow your wishes and use the money for your funeral and any other expenses or debts.
Our only word of caution for this joint account is to choose your person wisely. They’ll have access to your money while you’re alive, and you want to know they’ll use the money the way you want them to once you are gone.
3. Payable-On-Death (POD) Account
PODs, also called Totten Trusts, are savings accounts you can put into or withdraw money from whenever you want. The money saved in your POD is designated for your final expenses.
You'll permit one person access to your account once you die, and they must show a death certificate to get the money.
Again, make sure you trust the person named on your account. You want the peace of mind knowing they’ll use your money the way you want. This is typically why most of our clients opt for a final expense insurance plan instead – they know the money will be used by the right people at the right time.
4. Benefits for Veterans
If you’re a veteran, there are some benefits available to you if you’d like to use them.
- You can be buried in a national cemetery for free
- The Veterans Association, VA, will pay a certain amount towards a cemetery plot if you choose to be buried somewhere other than a national cemetery
- The gravesite, marker, and vault are all free
- The VA will give your survivors a burial allowance to help cover other funeral expenses
Be sure to check on these benefits if you were in the military, and let your family know about them.
5. Prepay through a Funeral Home
If you prepay for your funeral, you’ll pay current prices for the future services you’ll receive. This seems like a good deal, and it can be if everything stays in line.
However, we don’t recommend this option because there are too many variables that can change from when you make the payment and the time you die.
Three major cons of pre-paid funerals include:
- You’re locked into a particular provider and location.
- There’s always the possibility of the funeral home going out of business, causing you to lose your money.
- You’ll have a large sum of money tied up that’s not doing anything but holding your place. That same lump of dough could be earning interest.
However, if you like the idea of having everything paid for upfront, having all the details lined out, having a space reserved, and knowing that your family doesn’t have to do anything except show up, this might be the way to go.
6. Low-Cost Options
There are some low-cost options that might appeal to you for one reason or another. You're working with a limited budget, or maybe money isn't really a problem, but you'd rather see your loved ones spending it on their future rather than your end.
It doesn't matter what the reason is: if one of these options suits you, let your wishes be known so they can be carried out.
- Cremation – Cremation costs much less than the cost of a funeral. You’ll still have some of the fees of a traditional funeral, but you’ll eliminate some of the expenses such as embalming, caskets, burial plot, and a gravestone.
- At-home funeral – These are often more affordable and respectful to the environment than traditional funerals. They emphasize the family maintaining control in the days following a death, and offer a beautiful and healing experience for loved ones.
- Green burial – The average cost of a green burial ranges from $2,000-$5,000, about half or less of a traditional funeral. These burials are becoming more and more popular because they are simple, conserve natural resources, eliminate hazardous chemicals, and preserve natural areas.
- Donate your body to science – through body donation, you can help doctors, surgeons, and researchers make medical advancements and breakthroughs. They cover all costs related to the donation process including transportation from the place of passing, cremation, a certified copy of the death certificate, and the return of cremated remains to the family or a scattering of the ashes at sea.
These options are out-of-the-box and are not for everyone, but they’re money savers. If you think you would like one of these low-cost options, we encourage you to do a little research and discuss it with your loved ones. Who knows? You might find one appealing and open up possibilities you had never thought of before.
Just as you don’t want to think about dying, you don’t want to leave your family in debt and struggling to handle your arrangements.
Since Medicare doesn't cover funerals, and the death benefit from Social Security is very meager, you must decide the best way to handle your final expenses.
By studying your options, making informed decisions, and discussing your plans with your family, everyone will understand your final wishes.
Taking these steps to prepare for your last existence here on Earth will do two things:
- Ensure your final wishes are carried out just like you want.
- Make your death as easy on your loved ones as possible.
Once this is taken care of, you can live the rest of your life in peace, knowing you have done everything possible to prepare your loved ones for the rest of theirs.
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