Savings and Life Insurance

Two of the most popular forms of funeral funding

Savings and life insurance are two of the most common ways that people prepare for a funeral. They're a reliable source of funding and may prove to be the best assistance you can offer the loved ones you'll leave behind.


Many people provide for their own funeral out of their savings. The only disadvantage to this is that savings are considered part of the estate and are thus taxable. You also need to make arrangements so that the savings are accessible to the funeral planners. The amount of the funeral will have to be subtracted from the estate before will payouts are disbursed.

Life Insurance

Life insurance is an affordable, flexible, simple way to provide money for your funeral, burial and other expenses. You'll need to know the cost range you expect your funeral to fall into before you purchase life insurance. Although the funeral industry assumes that a funeral will cost between $5000 and $10000, there are low cost funerals. You may also want to make adjustments to your policy over the years to account for inflation.

You can purchase life insurance that's intended to expressly cover loans and obligations; however there are also other types with a savings element to build cash value that will help families overcome financial emergencies. Life insurance is a very flexible tool for financial planning in general, not just for funeral planning.

If you're looking for a life insurance policy that will cover funeral costs, you'll want a policy that will:

  1. Maintain your coverage level

  2. Provide coverage from the signing date

  3. Keep premiums at the same level for the rest of your life

Life Insurance vs. Funeral Insurance

Like buying funeral insurance, life insurance is a pretty safe bet to cover your funeral expenses. Some people complain that funeral insurance policies are far more expensive than any other insurance policies, so life insurance may actually be better, depending on the provisions of your policy. Be sure to read the fine print of your life insurance contract.

Some Qualifications and Conclusions

Of course, life insurance is likely to cost more than it ever actually pays out, but that's the nature of insurance. You can be assured that not having to take care of financial arrangements for your funeral will be a big relief to your family. One final advantage to using insurance (funeral or life) is that it's not considered an estate asset, where a savings account or trust fund is. Also, if you become ill your savings may be depleted by medical bills, where a life insurance policy will always be reserved for its intended purpose.

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