The Unspoken Paradox: Life Insurance / Funeral Policy
Sometimes we have to delve into those deep topics that make people uncomfortable. It is my desire today that you conduct a self-introspection on where you stand regarding this subject.
Despite the universal certainty of death, it remains a subject shrouded in a peculiar cultural silence, an uncomfortable truth we collectively acknowledge yet individually avoid in conversation. This aversion to confronting our own mortality, however, creates a critical paradox: while we shy away from speaking about death to spare ourselves existential discomfort, this very silence causes us to neglect the practical and financial realities that follow it.
Consequently, essential tasks like securing funeral or life insurance are perpetually postponed, not out of ignorance, but from a deep-seated psychological desire to avoid making tangible plans for an event we are not yet ready to accept.
When we pass away, we lose all of our rights. Whatever may be written in our will is subject to the court of law and may or may not be followed to our exact wishes by those we leave behind. The relationships we hope to honour and preserve may be shattered in our death, and others we never expected to be restored may see new life.
There are two financial aspects to our passing that need to be addressed: the immediate financial costs and our financial legacy. How prepared do we need to be for both? Are they our problem if we are not here, and what do we need to do? Inversely, if they are not our problem, what do we need to do? What happens if we do nothing?
Not all of us will have the same needs or wants, and therefore, the solutions will be different. There are certain standard principles to consider regardless of your personal situation or opinion on the matter. When we pass, there are immediate costs that need to be addressed, such as the funeral home and burial. As much as we don't have control over where we are buried and when, those who remain will make those final decisions based on how prepared we were and how prepared they are, money talks, even in death.
Depending on each individual, the paperwork required for our next of kin to claim the body and begin the burial process is significantly faster than the paperwork for them to access any money we may have saved. This is because the process of establishing who has the right to the estate (the things you left behind) can be complicated by marital status and the relationship of dependents, if there are any.
Some funeral homes will need immediate deposits to take over the burial process from the hospital or mortuary, depending on how you pass. However, you choose to plan, if you do, for your own burial, you should make sure these funds are immediately available to those you expect to participate in your burial.
One may have personal savings or investments, but those are not immediately accessible to our next of kin, as they require documents such as proof of death, a will, and other certifications for the funds to be released. Unless your savings are joint and the person who has access to those savings is still alive and willing to contribute those funds to your burial, they will not be available immediately.
Joint savings, depending on the designation, either become the full property of the other owner on your passing, or if designated as held in common, are immediately frozen until your estate redeems your portion. That person may choose not to use the money you have jointly to pay for your burial, even if it’s your spouse. They may be looking at the bills they will face after you pass and may decide to hold on to those funds and encourage the community mourning you to assist.
One can participate in a burial society where all contributions are earmarked specifically for the burial of society members. This type of arrangement helps to reduce the fear of lost value that one may feel if you have been contributing for a long time, and the total of your contributions feels like it is greater than the cost associated with your burial. The aspect that the funds are remaining within your community and are assisting others that you know directly reduces that feeling of waste.
Another option is to have a pre-paid funeral policy with a funeral home, which is set to a specific amount and adjusted for inflation. This helps to cap the costs associated with your burial; however, it may also restrict your decision on where to be buried based on the location of the funeral home you choose to work with. These and other options associated with a home are best discussed with the funeral home or licensed insurance provider, and it's important to ensure the policy has funds that are immediately available to whoever claims your body, specifically for burial costs.
This is where having the end in mind matters. Do you expect to pay for your own burial? Are you of the mind that those who survive you will do as they please and therefore will be the ones who need to worry about burying you? This is an important conversation to have with those close to you.
Whichever option you choose, it’s important to ensure those you expect to take care of your financial arrangements are aware. It’s important to openly discuss death and what your expectations are, and to hear from those around you. For example, children raised in the diaspora may be reluctant to bury a parent in a country that is foreign to them, and to experience a funeral for the first time in their lives when they are burying their parents.
It’s important to expose them to what to expect, having them attend funeral so they are aware of the cultural expectations, and discussing where you would want to be buried and who needs to be informed, and what funds or other investments you have set aside.
It may be that you’re leaving them real estate and other investments, and because of that, you know they will be taken care of in the long term. They should know that you expect them to handle the short-term responsibilities of burying you, and as such, you should encourage them to either have policies that include you or liquid savings accounts that account for burying you.
You may also be in a position where you have no immediate relatives in the diaspora and are not expecting anyone to go to great lengths to bury you extravagantly. Your immediate friends, co-workers, and even neighbours need to know that. You may be surprised that your distant aunt/uncle you have not spoken to in decades, decides to mourn you and wants to bring your body back from the diaspora to be buried with your parents.
Life has unexpected moments every day, yet as we breathe, it allows us to make new decisions every day that we have to live with the consequences of.Death is inevitable, but financial and cultural preparation is a sign of love and responsibility. Plan ahead, communicate openly, and ensure immediate funds are available to avoid burdening others. Death deserves our respect in preparation, not for ourselves, but for those around us.
About the writer:
Grace writes in her own capacity as an individual with a passion to write. With over 15 years of experience in financial services, Grace Vela provides personalized guidance to turn financial aspirations into reality, drawing inspiration from her own experiences. Grace is passionate about empowering others to create a life of peace and financial freedom. She is neither a financial counselor nor a licensed insurance professional. Please speak to your financial advisor or insurance professional for specific advice. Grace Vela is on YouTube: www.youtube.com/@deservegrace
