How to discuss end-of-life expenses with loved ones: a conversation guide

Death doesn’t come cheap. The average family spends more than $12,600 on expenses related to the loss of a loved one, according to the 2024 “Cost of Dying” report from Empathy, a website that provides support services to those who are grieving.

No one likes to think about their death or that of a loved one. Rather than avoid the subject, families should address this challenging topic head-on. That means having open conversations while taking steps to relieve the financial burden. Final expense insurance can help.

“It’s called a couple different things,” says Dave Emmette, senior marketing broker with specialty insurance provider Amwins. You may see final expense insurance sold as burial or funeral insurance, but regardless of the name, “it’s essentially a whole life policy,” Emmette says.

Guaranteed to provide coverage so long as premiums are paid, final expense insurance should be part of any conversation with your family about end-of-life expenses.

Why discussing end-of-life expenses is crucial

It’s unfortunate, but the end of someone’s life doesn’t mean the end of their bills. After you pass away, loved ones could be confronted with the following:

• Burial or cremation costs
• Medical bills
• Outstanding debt
• Costs to clean and sell a property
• Mileage and meals away from home for those handling the estate

Medical bills and debt can’t be inherited, but creditors can file a claim against your estate if you pass away and leave outstanding debt. That means assets you intend for your heirs – such as the proceeds from the sale of your house – may be seized by creditors to pay off debt instead.

Discussing last wishes can help family members avoid being blindsided by steep bills when they are grieving. You should share how you hope your loved ones will pay your final bills and inquire into your family members’ plans for their final arrangements.

Starting the conversation about end-of-life expenses

Before you sit down with your loved ones, plan what you’d like to say to them.

“What are you looking to accomplish?” Emmette asks. “And what do you think the cost will be?”

Some items to consider:

• Your preference for a full burial, cremation, or other options, such as donating your body or organs for medical purposes
• Whether you have property or assets in another state, such as a vacation home, that will require travel to liquidate
• Who you would like to handle your estate
• What assets you have to pay for expenses, such as final expense insurance, an annuity, or savings

Even if your goal is to learn more about your loved ones’ wishes, starting the conversation with a discussion of your own plans can open the door for others to share what they would like for themselves.

These frank conversations can be difficult and should be timed appropriately. Broaching the subject in the middle of a holiday dinner, for instance, may not be the best idea. Your relatives will be unprepared for such a discussion, and the holidays can be an emotionally charged time.

Instead, select a time and setting conducive to a relaxed conversation. Consider inviting your parents and siblings over for dinner with the express purpose of talking about estate planning. Tell them you are working on your plan and want everyone to know your final wishes and how they may be financially covered. 

If you think your family cannot navigate these discussions on their own, consider enlisting the help of a neutral third party, such as an insurance broker or financial planner.

“Sometimes, [clients] will even bring me in to have that conversation,” Emmette says.

Easing into the topic with empathy

Once you and your loved ones have gathered for this conversation, thank them for their time and acknowledge that it’s not an easy topic to discuss. Start by mentioning what you have done to prepare for your final expenses. While you don’t need to go into specifics, you should touch on the following:

• Your expected final arrangements, such as a burial or cremation
• Who you would like to handle your final affairs, and why you chose that person
• Whether you have prepaid any expenses or have final expense insurance or other assets set aside to pay for your final costs
• Where loved ones can find your essential paperwork when they need it

You can then follow up by asking loved ones if they have made any plans themselves. They may not want to share details, which should be respected. However, you should ask where you or other family members can find details of their plan when needed. For instance, some people may keep a file in their home or ask an attorney or other professional to store their documents.

As you have this discussion, emphasize that your goal is to ensure everyone’s wishes are respected. That includes making all family members aware of who will execute those wishes and how they will be paid.

Basics of end-of-life expenses and how final expense insurance can help

If you or a loved one doesn’t have money to pay for a funeral and other end-of-life expenses, final expense insurance can help. This is true even if someone is older and not in perfect health.

“It’s typically easier to qualify for,” Emmette says. Rather than a traditional underwriting process with a health exam, final expense insurance might look at prescription and motor vehicle reports before approving a policy.

These policies are aimed at individuals in their 60s or 70s, Emmette says. “Maybe they have a term (life insurance) policy, and it’s expired,” he says. At their age, it may be difficult to be approved for another term policy, but a final expense policy can be accessible.

Final expense insurance is intended to cover funeral costs and related expenses after a person dies. Policies can range in value from $5,000 to $50,000, but $10,000 to $15,000 seems most common, Emmette says.

At those values, a policy should be able to cover the cost of a funeral with some money left over. According to the National Funeral Directors Association, median costs for final arrangements in 2023 were as follows:

• Funeral with viewing and burial (without vault): $8,300
• Vault: $1,695
• Funeral with viewing and cremation: $6,280

Expenses are highest in New England, while prices are lowest in the mountainous western region, which runs from Arizona to Montana.

Answering questions and addressing concerns about end-of-life planning

Whether you are sharing the details about your own policy or encouraging a loved one to consider final expense insurance, you should be ready to answer questions. For instance, your loved one might wonder how much a policy will cost and whether it can be canceled.

“It’s a guaranteed policy,” Emmette says. “It’s guaranteed to pay out as long as the premiums are paid.”

If someone passes away within two years of a policy being issued, it may be subject to a “look back” period, Emmette says. In that case, the company might double-check to ensure all answers on the application were truthful and that the death wasn’t the result of suicide.

Pricing can vary depending on someone’s age, gender, tobacco usage, and other factors. Women generally pay less than men; at age 65, a female may pay $41 a month for a $10,000 policy compared to $54 a month for a man.

Although final expense insurance is intended for funeral, burial, and other end-of-life costs, it can be used for any purpose. Like any other life insurance policy, you must name a beneficiary who will receive a settlement when a claim is filed. It is up to that person to use it for its intended purpose.

Organizing next steps for family members

At the end of the conversation with your loved ones, formulate a plan of next steps. For example, if your parents want to look into final expense insurance, schedule a date to help them compare quotes.

If everyone already has plans, you should create a shared document that includes details of where to find paperwork. For instance, a sibling’s end-of-life documents may be kept in a binder in their office, while your parents’ files are with their estate attorney.

If you get any pushback from family members, emphasize that this is not about being nosy. Instead, it is a way to ensure that their wishes will be followed while also making handling end-of-life affairs less stressful for loved ones.

Conclusion

End-of-life discussions are rarely pleasant, particularly when discussing finances. However, discussing what you would like for your final arrangements and how to pay for it will provide comfort and security to your loved ones. They will know precisely what you want, and they won’t have to feel financially stressed while carrying out those wishes.

If you don’t have plans for how your end-of-life expenses will be paid, consider whether final expense insurance is right for you and your family. It could be the final gift you give to your loved ones. 

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