Retiring

The Importance of Having a Plan for Final Expenses

By Walter H. Zultowski, Ph.D

Almost seven in ten Americans, ages 50-70, say that having an adequate amount of life insurance is important to their financial “peace of mind.”1 However, some believe that once their working years are over, or coming to an end, that the need for life insurance disappears. Unfortunately, this belief doesn’t account for the plans and needs of a spouse/partner in retirement, nor does it consider the needs of a dependent child, grandchild or even aging parents.


In the Amica Life Financial Peace of Mind Survey, eight in ten Americans between the ages of 50 and 70 agreed with the statement: “it is important to me not to leave behind any debts to be paid by my heirs after I pass away.” However, almost two in ten in this group did not have any individually purchased life insurance coverage.2 Having coverage from an employer is a great benefit, but it is coverage that typically ends or becomes prohibitively expensive to keep once you leave the workforce. By having individually purchased life insurance you can help ensure your loved ones have protection from being overwhelmed by debts and final expenses.

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One of the strongest desires expressed by Americans over the age of 50 is that they don’t want their deaths to create a financial burden for their loved ones.

Often, final expenses are just looked at as funeral and burial costs. While the cost of a funeral with burial can run $7,000-$10,0003 and cremation can be between $3,000 and $10,000,4 many believe that they will have the resources to cover this expense. However, it’s important to note that final expenses extend beyond the cost of a funeral. In fact, 49 percent of Americans age 50-70 have more than $10,000 in debt, excluding their mortgage,5 while 40 percent of Americans age 65-74 carry mortgage debt.6 Additionally, there may be credit card debt, unpaid hospital and medical bills, as well as probate costs and legal fees.

49% of Americans age 50-70 have more than $10,000 worth of debt excluding their mortgage.

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Further, according to the Federal Reserve Board’s 2013 Survey of Consumer Finances the typical household approaching retirement has only $12,500 in financial assets outside of their retirement savings,7 and with Americans living longer than ever, there is a chance that many will deplete their savings in retirement. When taking these numbers into account, the possibility of passing away with high levels of debt becomes a harsh reality.

Depending on your current situation, having an individually purchased term life policy and a small amount of whole life insurance in place when you pass can be an affordable strategy to help cover final expenses. The amount of coverage needed is different for everyone, but can easily be determined by a needs analysis.

One of the strongest desires expressed by Americans over the age of 50 is that they don’t want their deaths to create a financial burden for their loved ones. With life insurance in place, you can have peace of mind, knowing that you’re helping lessen the financial burden on your loved ones.

1, 2, 5 2015 Amica Life Financial Peace of Mind Survey.

3 General Price List Study, National Funeral Directors Association, 2013.

4 Cremation Business Practices Study, National Funeral Directors Association, 2014.

6, 7 Survey of Consumer Finances, Federal Reserve Board, 2013.

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