Life Insurance Companies - Importance of Good Policy When a Loved One Dies
One thing that we never want to think about is losing a loved one. But this occurrence is an inevitable part of life. And despite our reluctance to discuss it, not doing so can mean much more heartbreak in the form of financial trouble.

The cost of a funeral can run a grieving spouse or family thousands of dollars. And if your loved one had no life insurance, the stress of how to come up with the funds to pay for final expenses could be a heavy weight in addition to the pain of losing them. And the financial strain can last for years after the passing of a loved one.

The Cost Of Funeral Expenses

Without life insurance, the cost of funeral expenses rests entirely on the spouse or the family of the deceased. Because state laws usually require it, preparation of the body must occur in a certified funeral home, which can cost up to $2000. Another set of laws states that there are only two choices for someone who has died; cremation or burial. And each has its costs.

Cremation is far less expensive at approximately $1500 than a burial with a basic casket at around $8500. Just these initial costs alone can add up to anywhere from $3,000 to $12,000. Either amount is a lot of money for a family to have to come up with all at once. Other expenses that will need to be covered immediately following the death of an uninsured loved one are the funeral procession to the cemetery in a hearse, as well as visitation prior to the funeral.

For families who have to pay funeral costs out of their own pockets, a loan from the bank may be needed. Or, credit cards may need to be maxed out and savings liquidated in order to cover these expenses.

Debt Payments

Unfortunately, the payments don't stop at the funeral when a loved one without insurance passes away. If they had debts, these too will need to be paid. And with no funds available from a life insurance policy, it's up to the family or a spouse to carry the full weight of repayment.

Should a spouse not be able to repay joint debt on their own, their credit score can be negatively impacted, along with their quality of life should they have to relocate to cheaper accommodations to continue to be able to make payments.

And even if a loved one was great at saving money and had a big savings account, it is as good as gone if they didn't have a life insurance policy, as it will have to be used to pay down their debts. In addition, a loved one's assets can also be sold in order to cover debt, which can mean that the spouse or family is left without a vehicle, property or important family heirlooms.

The Basic Needs Of Children

Believe it or not, a loved one without insurance who leaves young children behind actually puts them at risk of being placed in the care of guardians, even if they had a spouse at the time of death. This can and does occur when there is no income to replace that of the primary wage-earning spouse. In addition to the financial suffering of the surviving spouse, guardians named by the deceased will have no help carrying the sudden financial burden of children that must be fed, clothed, raised and schooled.  It is recommended that you compare life insurance companies for a policy that will adequately cover your family should the need arise.

Alternatives To Getting Life Insurance

Life insurance can help you to cover many expenses that will need to be attended to following your death. And it can offer your family the protection and security they need. But if for some reason life insurance isn't something you are interested in getting, there are alternatives.

You can prepay your funeral expenses, including your entire funeral service and your cremation or burial package. A savings account can be used to build a reserve that your family can access in order to pay for your expenses. But as mentioned above, your savings account will be one of the first things accessed by creditors if you have debts that were unpaid or those that are ongoing at the time of your death. Another insurance alternative is to look at your investment portfolio and decide which of your investments would help your family the most should you die suddenly.