- That depends. If you already have term or whole life insurance, your loved ones can use your existing policy to pay final expenses. If you have term life insurance and you outlive the policy term, you may want to consider final expense insurance at that point.
- Alternatively, if your family will have plenty of assets to work with when you die, you could use what’s called “self-insurance.” “Self-insurance” is one of those terms that sounds more complicated than it is. To self-insure is just to use your own money rather than use a life insurance payout.
Could your family self-insure for your final expenses? It’s a good idea to figure around $10,000 for the funeral expenses, but will you also want a catered party after the memorial service? A trip to a faraway land to scatter your ashes? Will you leave big bills behind? If you answered “yes” to any of those questions, consider springing for final expense insurance. And it’s probably best not to count on the lump sum death payment from Social Security to pick up the slack. It’s only $255.