Do you have life insurance? What is the reason why you purchased it? Is it to provide a specific payment or support a certain family member after you are gone? Maybe you want to use it to supplement a loved one’s income or make sure a mortgage is paid off. You may also be counting on the life insurance policy being used to help cover end of life expenses, such as funeral or cemetery costs.  


There are many decisions to be made when choosing the right policy for you and your family. While it begins by each of us taking a careful look at the reason why we are purchasing the life insurance policy, there is more to do. We need to carefully review the terms and conditions for the policy we purchase or currently have in place, to know how it will operate when we need it to.


Often, our clients share that they are planning to use their life insurance policies to pay for funeral and cemetery expenses. When this is the purpose behind your policy, it is crucial you make sure it will available the way you need it to be when you pass away. Let’s look at the following four reasons why a life insurance policy may not be the right choice to pay for expenses like these.


1. Missing funds. The funds that are available for you today through your life insurance policy may not be available when you pass away to help your family cover your funeral expenses.  For example, a loan might be taken from the policy during your lifetime that is never repaid, reducing the amount your family is counting on receiving, or the policy might have to be liquidated in light of specific long-term care planning strategies.


2. Shortfall and inflation. Inflation changes every year in the United States. This is something to consider whenever you choose a life insurance policy. Will your policy be able to handle the inflation or will there potentially be a shortfall in your policy? How will you account for the difference when your family needs it?


3. Delayed payout. The process of paying out a life insurance policy doesn’t happen quickly. In most situations, the costs for funerals and cemetery expenses need to be paid immediately and cannot wait for a payout. Who will pay the upfront costs? Do not wait for your family to be surprised by these costs at a time they are grieving and already under a tremendous amount of stress.


4. Beneficiary misunderstandings. Naming a beneficiary for your life insurance policy should not be difficult, but there are questions that need to be addressed if you want this money to be used to pay funeral and cemetery expenses. Have you told your named beneficiaries what the money is to be used for? Do you have more than one beneficiary? Are they all in agreement on how the money should be used? What if your beneficiary dies before you? What if your beneficiary does not pay his or her share toward cemetery and funeral costs?


Before buying a life insurance policy make sure that you ask the questions you need answered by a trusted professional. If you’re worried about paying for cemetery and funeral costs, bear in mind that life insurance is only one option available to you in your planning. You may also want to consider funeral insurance or funeral trusts or set up a specific savings account to make sure your beneficiaries have immediate access to use the complete amount of money you set aside for these costs when they need it the most.  Don’t wait to talk to the professional you trust to make sure your wishes will be honored and carried out when the time comes.


Ready to start planning ahead? Let us know by sending us an email at or calling us at (715) 843-5001. We look forward to talking to you!