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Dying With No Life Insurance

Researcher & Writer
December 03, 2019

Have you ever considered what happens if you die with no life insurance coverage and your family doesn't have the money to pay your funeral expenses? What about other expenses, like the mortgage, grief counseling, and replacing your income?

For many, a life insurance policy seems like a luxury. It doesn't help you put food on the table or a roof over your family's heads—at least, not right now. But such an insurance policy could help your family pay off debt, give you a proper sendoff, and go on without you.

If you're on the fence about buying life insurance coverage, consider what dying without life insurance looks like—and how an insurance policy could help your spouse and other loved ones avoid that.

Dying with no life insurance is no laughing matter. However, you need to consider how much coverage you can afford and not jump at the first company advertising final expense or burial insurance. At TermLife2Go we work with the top life insurance companies, the best no medical exam companies, and the best final expense companies. If you or a loved one needs life insurance, please give us a call today.

Life insurance and death: planning ahead

The following article will help shed some light on the potential expenses accompanying a death of a loved one and what happens when there is no money to pay for a funeral.The key is to plan ahead for that inevitable day because no one knows when their life may end.

Dying without life insurance

Life insurance is something you buy for yourself, but to benefit your loved ones. There is precious little you can control after you pass away, but whether or not you leave those closest to you with the provisions they may need is something you can plan for while you’re still alive.

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Funeral costs

Apart from trying to provide for your family, burial and final expense life insurance is also about making sure your death isn’t a financial burden on the ones you love. The average cost of a funeral and burial can be somewhere between $3,000 and $25,000 – is that something you want others to have to pay for? If you die without life insurance, then someone else is going to have to pay for it.


Planning Your Future

While planning for your family's future, consider creating a will using Fabric. Fabric is an online life insurance company that also offers a free will creation service and more.


How to pay for a funeral with no life insurance

Being a financial inconvenience is one thing, being a financial impossibility is another. Not everyone has thousands of dollars on hand to pay for a relative’s funeral, especially when dealing with the unexpected. If you happen to die without ample life insurance to cover final expenses and your survivors do not have the financial means to pay for your funeral they may have to choose from among these sad alternatives:

  • Get a loan. Your survivors will not only have to pay for your funeral, but also pay interest and damage their credit score in order to bury you.
  • Ask the funeral home for a payment plan. This is similar to a loan in that it straps your relatives down with a monthly payment for a long time, but probably has little to no effect on your relative’s credit score.
  • Release Your Body to The County Coroner’s Office. This means your body will be handed over to the government and they will be responsible for burying or cremating the body. Your survivors may have the option to retrieve the ashes (usually for a fee). If they do not, then your ashes will go into a common grave. If this is not a depressing way to finish your time on earth, then we don’t know what is!
  • Contact Social Security Administration. If you have collected social security prior to dying, the social security administration may offer some assistance to your family when you pass away.
  • Contact a Non-Profit Organization. There may be a non-profit organization that offers assistance to survivors. This normally depends on the circumstances of your death or other factors related to your life. For example, certain non-profits may offer help for the children of single parents, minorities, or so on.
  • Start a Crowdfunding Campaign. If you know a lot of people, your survivors may be able to crowdfund your funeral, such as using GoFundMe. By asking friends and family to contribute small amounts of money rather than sending flowers, your immediate survivors may be able to fund your funeral.

Other expenses after you die

When you leave this earth, funeral and burial costs are the most immediate expenses. However, if you die without life insurance, your survivors are likely to incur other expenses in the days and months to follow. Some of those expenses include:

Travel Expenses: It is unlikely that all of your important survivors live in the same city. Some of them may have to take a flight and stay for days in a hotel in order to be with loved ones during your funeral.

And perhaps your body needs to travel? Do you plan on being buried in the city, state, or country you currently live in? If not, you should plan ahead on how your body will be transported when you are dead.

Lost Wages: Your death will likely cause some heavy grieving. For most, it is difficult if not impossible to go back to work only a few days after such a traumatic loss. Your surviving spouse or partner, for example, may take weeks if not months to gather up the mental and emotional strength to return to work. It is unlikely that he/she will receive more than a few days of paid time leave.

Counseling: Processing your emotions and grief alone may be difficult, and sometimes professional help is required. While health insurance may cover counseling in some instances, it is not guaranteed. With most counseling sessions costing $100 or more an hour, it is likely that it may cost someone thousands of dollars to heal from your death.

Taxes and/or Debt: Depending on who you leave behind, that person may be responsible to pay any pending taxes or debt. If your survivors are still living in a house you own, they will likely owe some type of property tax, which they may not be prepared to do without selling the house.

Medical bills and long-term care: Many people spend some of their last days in the hospital or a long-term care facility. Both are costly and can leave your spouse or family with additional bills to pay.

Other fees: In addition to these costs, your next of kin will need to purchase several copies of your birth certificate. Some creditors, banks, and other organizations require this proof of death to close accounts or tie up other loose ends.

Using life insurance for estate planning is typically a wise choice. It is one of the ten reasons whole life insurance is better than term life insurance. However, even if you do not have much of an estate to make plans for, be aware that your estate may be on the hook for any secured debt you owe. Your credit cards might go away but other debts, such as student loans, may continue even after you have died.

What if I don’t have life insurance?

If you don’t have life insurance, and your estate lacks the necessary funds, any and all of the above expenses may be a burden on your survivors. The loss of a loved one is a very difficult time, and by having made no preparations for your death, you will likely make it harder for your survivors.

Many people assume life insurance serves the purpose of providing survivors with a cushy life after one’s death. The truth is, life insurance is to make sure your death and burial doesn’t financially bury your loved ones. By taking out a life insurance policy, you are making provisions for the inevitable, and your loved ones will be grateful that you took the time and energy to do so.

Lastly…

We’d like to acknowledge the fact that most people, if given the choice, would not choose to die without life insurance.  After all, if life insurance were free, we would assume that most people would take it, right?

Life insurance isn’t free and what’s even worse is that in most cases particularly if you’re looking to purchase a Whole Life Insurance Policy or a Term Life Insurance Policy you’re also going to need to be able to “medically” qualify!

And while… a Guaranteed Issue Policy won’t require to you be able to “medically” qualify, they may not be offered in or area or they may be too expensive to fit within your budget. If this is your case, consider applying for a no-exam life insurance policy.

What if I buy a life insurance policy?

Between funeral costs, debt, taxes, and lost income, a person's death can take a toll on surviving loved ones. To lift this financial burden, most people have two options: save up a nest egg or buy life insurance.

Self-funding your funeral expenses

Saving money for your final expenses can take decades for people on a tight budget, but it is possible to build an estate that covers your spouse's needs when you're deceased.

If you're considering self-funding, take stock of all the expenses your spouse and other loved ones would have when you're deceased. Look at your monthly budget and decide how much you can put toward saving up for those costs. Finally, calculate how many years it would take to amass that amount.

No matter how quickly you can save for your final expenses, you can't predict when you'll die—or whether you'll have enough time to save up.

Finally, if you don't create a legally-sound will, your estate may go through probate. If that happens, it could take months for your family to receive those funds, leaving your spouse to cover those expenses themselves in the meantime. Finally, if you have any outstanding debts, creditors may be able to siphon away your estate to reclaim their loses.

Buying life insurance

Let's say you choose to get a life insurance policy instead. 

You'll pay premiums each month, but depending on the policy, these could be as inexpensive as a few cups of coffee.

You'll also choose a death benefit amount. This entire lump sum (from thousands of dollars to millions of dollars) will typically be available to your beneficiary just weeks after you pass away. And in most cases, you're covered as soon as your application is approved and you pay your first premium.

Buying a policy is like creating an instant estate, but better. Life insurance proceeds are tax-free and don't go through probate. Creditors can't claim your death benefit either.

In short, life insurance can be cheaper, simpler, and safer than self-funding your funeral costs.

Applying for life insurance may include a medical exam or medical questionnaire, and may take a few weeks. You may need to speak with a licensed life insurance agent. But if you want your instant estate even faster, you can apply for a life policy online instead.

Apply online for life insurance

Life insurance is notorious for being a bit behind the times when it comes to online applications. Luckily, there are a few companies that do offer an online application that is quick and easy to fill out, so if you're ready to plan ahead, you can start right away.

Fabric
Haven Life
Bestow

Fabric is an online company that offers term life insurance. In addition to life insurance, they offer other family planning tools like wills and a vault for your must-have financial info.

Haven life offers term life insurance. Their application is easy and they provide an instant decision on coverage eligibility and your rate.

Bestow offers 10 and 20-year term life insurance plans. There's no medical exam and algorithmic underwriting allows for a quick result.

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Issuance of policy may depend on answers to a medical questionnaire.

Check out our Life Insurance Quotes page and see if there might be something that will work for you!

Written by
TermLife2Go
We are a team of life insurance experts with the simple mission of helping you find the best coverage for your unique situation. We research, review, and rank life insurance companies to make that process easier.