How to Explain the Real Cost of a Funeral & Help Your Clients Plan for One

The loss of a loved one is never easy. Sorrow, heartbreak, grief.

Your clients will have a hard enough time dealing with all of these emotions. They’ll also be responsible for decisions, decisions, and more decisions. It can be a chaotic time handling the inevitable, especially when not prepared.

Trying to plan a funeral comes with dozens of questions. Traditional burial or cremation? Which funeral home? Which cemetery? What kind of casket? What kind of service? On top of all of these questions, decisions and more, the most important one looms… “How are we going to pay for all of this?”

The question for you as an insurance agent is, how can you help your clients be prepared before an inevitable event like this occurs? We’ll show you a simple way to build a plan that your client will trust and feel comfortable with.

The Real Cost of a Funeral

First, let’s look at the real cost of a funeral, which is $9,995 based on the National Funeral Directors Association’s (NFDA) latest published statistics in 2023. This cost is the sum total of several costs associated with a basic funeral package. You can see these costs broken down in the table below.

CAUTION: These numbers only tell half of the story.

What Items Does the Median Total Cost of a Funeral Not Include?

There are many items that are not included in the NFDA’s median cost of a funeral estimate. These types of expenses will add to the total cost, and in many cases, far exceed any original estimates.

• Burial plot (if traditional burial)
• Opening and closing the gravesite
• Memorial stone
• Floral arrangements
• Death certificates
• Obituary
• Honorarium
• Catering
• Travel expenses
• Miscellaneous items

In some cases, these additional items can double the cost of a funeral depending on the geographical area, how elaborate the arrangements and services are being provided, or simply by missing key aspects that can be overlooked.

For example, normally, a preset number of death certificates are provided at no charge. If additional certificates are needed, there is a per certificate charge. These costs are subject to local statutes. Hidden costs like these can add up quickly.

Take the time to research and investigate each of these items in your service area. This will be an eye-opening exercise for both you and your client base.

As an agent, it’s important to understand all the additional costs associated with a funeral in more detail. Calling your client’s local newspaper to investigate the true cost of an obituary can be very valuable. It shows that you’re willing to take the extra step to help define potential costs that will affect your client.

It presents you in a more professional light with your client especially when you can articulate more details, that they probably haven’t given much thought to yet.

So, take the time to investigate each of these items in your service area. This will be an eye-opening exercise for both you and your client base.

What Tools Are Available to Help You Educate Your Clients?

Now that you have an idea of the real cost of a funeral, let’s talk about how you can educate your client on this matter.

Online Calculators

Many of Ritter’s final expense carriers provide an online calculator that can help you estimate your clients’ final expense needs. This can give your clients a real sense of the expenditure that will be needed for a funeral. At Ritter, we can help you decide which calculator is best suited for your needs in the field.

Marketing Systems

One of the most powerful tools on the market is a marketing system that is available to our agents free of charge if you contract with certain carriers. This system can help both the agent and client. From the agent perspective, this system provides training modules, mailers (tailored to your business), and basic scripts that can help you guide your client to an informed decision.

On the client side, you can provide a membership for a final expense planning service — a one-stop shop to help clients with legacy planning services, end-of-life planning, guidance and assistance, estate planning support, support for survivors (e.g., bereavement travel assistance, grief counseling support), and even assistance for celebrating life events (e.g., FTD.com flower discounts), prescription drugs, and family legacy DVD. It’s as easy as dialing a single number for help!

Life Pre-Screen Form

Another tool that can be helpful is the Life Pre-Screen worksheet. This form will help you, as an agent, pinpoint your clients’ health risks, which will enable you to provide accurate quotes to your clients so there are no surprises as you explore their final expense options. You can couple this form with a Ritter Fact Finder, discussed below.

Ritter Fact Finder

The Ritter Fact Finder is a one-page client profile sheet that can be used in your initial meeting with your client. Using our fact finder is a benign, very casual way of gathering all of the information necessary to determine which final expense products will be appropriate for your clients.

In addition, it can help you get an overall picture of a client’s insurance and financial status, as well as uncover opportunities to present products other than life insurance, such as health and ancillary products or even annuity options.

For information on how to sell final expense, check out our FREE eBook, The Complete Guide on How to Sell Final Expense Insurance!”

Summary of How to Help Clients Understand the Need to Cover Their Final Expenses

Here’s a review of the basic steps that you should employ as you help your clients prepare to cover their end-of-life expenses and understand and navigate their options.

1. Research — Get the correct facts on the total cost of a funeral. Make sure you’re covering all basic and non-basic items, as well as any “hidden” costs. Be knowledgeable!

2. Client Discussion — The two most important aspects of this initial discussion for you, as the agent, are to listen and educate your clients. First, understand your clients’ concerns, then take the time to address those concerns and educate them on the cost reality of a funeral event.

3. Strategy — Formulate a plan with your clients. Get as much appropriate health information on your clients as possible by using a fact finder. Be prepared to present them with the best options to cover their financial requirements. Check that you have the right products in your agent toolbox to ensure your providing the best possible solution.

Rounding Out Your Final Expense Toolbox with Products

Your toolbox would not be complete without the proper final expense products in it. It’s important for you as an agent to understand the differences between the types of products that cover guaranteed issue, graded or standard, or more traditional situations.

Each carrier presents their products with unique features, such as special riders like chronic illness, higher limits on face values, and lower age limits that might take little to no underwriting.

As an agent, you might find yourself in unique situations that could call for a funeral or estate trusts.

Take the time to understand these products and their differences so you can use them when and where it’s appropriate. Getting help from your field marketing organization (FMO) is an appropriate step in this process. Our staff can make recommendations and guide you to the correct carriers and tools for your toolbox.

Final Expense Insurance Recap

New to final expense coverage? Essentially, it’s a whole life insurance policy thats purpose is to cover funeral, cremation, burial, and other expenses after the insured’s death.

Since final expense insurance is a whole life policy, it builds tax-deferred cash value over time. This cash value can be borrowed from while the insured is alive, but it’s important to note that doing so can affect the death benefit of the policy.

Death benefits are generally guaranteed for final expense insurance as long as the premiums are paid. However, if the policyholder passes away during a policy’s set waiting period, the beneficiaries normally have their premiums returned to them.

For guaranteed issue final expense policies, the average waiting period before benefits will be paid is two to three years. For modified or graded final expense policies, 100 percent of the benefit is paid typically after the third year of policy ownership.

Death benefits are generally guaranteed for final expense insurance as long as the premiums are paid.

Premium amounts for a final expense policy depend on age, sex, health, tobacco use, coverage amount, and insurance carrier. On average, a final expense policy can cost between $40 to $80 per month. Guaranteed issue, graded, or modified final expenses policies are a good fit for those who have health conditions that prevent them from qualifying for a standard policy.

What Does Final Expense Insurance Cover?

We’ve touched on selling final expense insurance here on our blog, but one thing we haven’t really explored is just how much a final expense policy can cover.

In short, this will depend on factors like the amount of the policy purchased, if the policy is borrowed from while the insured is alive, the end-of-life policies, and the amount of expense a person leaves behind.

Final expense policies are designed to cover:

• End-of-life expenses (e.g., inpatient care, medical services and supplies, hospice, transfer and preparation of remains)

• Funeral arrangements (e.g., cremation/burial, urn/casket, vault, facilities, services)

• Any outstanding medical, legal, or credit card bills

These policies often have a face value anywhere from $5,000 to $25,000, but death benefits can be as high as $100,000.

Final Expense Coverage Put into Perspective

We’d like to introduce you to Ruth and Oscar. Both have just purchased a final expense policy, and we’re going to review the average expenses they could leave behind to see how much their policy can cover.

Keep in mind, the estimated costs referenced will likely increase over time as the cost-of-living increases. This makes coverage like final expense insurance that much more important!

Ruth is a non-smoking, 67-year-old female from Harrisburg, Pennsylvania. . She has a $10,000 preferred final expense policy from a competitive carrier and pays a premium of roughly $41 a month.

She lives comfortably on her Social Security and supplemental income from a part-time job and does not plan on borrowing from her policy’s cash value during her lifetime. Since Ruth lives in Pennsylvania, her family can expect to pay around $8,816 for her funeral.

With the coverage of her $10,000 guaranteed death benefit (keeping in mind that her preferred policy makes her eligible for 100 percent of her benefit the day her coverage begins), her final expense policy would be able to cover her funeral and have some left over for any end-of-life expenses!

Oscar is tobacco-using, 70-year-old male from Baltimore, Maryland. He has a $10,000 guaranteed issue final expense policy from a competitive carrier and pays a premium of roughly $99 a month. He lives comfortably on his Social Security and does not plan on borrowing from his policy’s cash value during his lifetime.

Since he lives in Maryland, his family can expect to pay around $9,188 for his funeral. Oscar has multiple health issues, and he could run into further health complications due to smoking down the road.

With the coverage of his $10,000 guaranteed death benefit (keeping in mind that he meets his policy’s waiting period), his family could be left with expenses, but his final expense policy will cover a good chunk!

Maybe if you were Ruth and Oscar’s agent, you could find them final expense policies that can better serve their needs and budgets!

Let’s also introduce you to Max. He’s purchased a final expense policy with a larger face value.

Max is a non-smoking, 66-year-old male from Houston, Texas. He has a $35,000 preferred final expense policy from a competitive carrier and pays a premium of roughly $211 a month. He lives comfortably on his Social Security and does not plan on borrowing from his policy’s cash value during his lifetime.

Final expense coverage is a must for Max, so he and his insurance agent review his budget and work to make the monthly final expense premium amount doable along with his other expenses. Since Max lives in Texas, his family can expect to pay around $8,790 for his funeral.

With the coverage of his $35,000 guaranteed death benefit (remembering his preferred policy makes him eligible for 100 percent of his benefit the day his coverage begins) his beneficiary would be left owing nothing and receive a generous payout. This is Max’s intention, as he wants to leave his daughter with a little money in addition to covering his expenses after death.

As a professional insurance agent, it’s your job to make sure you have done the proper homework to ensure you have the correct information and can help your clients decide on the correct life insurance strategy.

Additional opportunities or referrals can follow. Remember, you have the ability to help your clients navigate a chaotic time in their lives if you can present a simple and affordable plan.

At Ritter Insurance Marketing, it’s our job to help you give your clients what they need, and registering with RitterIM.com is completely free. Aim to become a trusted resource that your clients can rely upon. Good things usually happen when you focus your attention on the small details.