Would you be able to pay for a $400 expense right now?
Yes or No?
The fact is that 47% of Americans — 1 in 2 — said they could not afford a $400 emergency expense or they would be forced to sell something or borrow the money to cover it, according to the Federal Reserve “Report on the Economic Well-Being of U.S. Households in 2014.”
If nearly half of Americans cannot come up with $400 at a moment’s notice, how would they even begin to afford paying for a larger expense such as a funeral?
Ask yourself: if you passed away suddenly, would your family members be able to pay for the funeral?
Who would pay it — your spouse? Your children? Your parents?
The median cost of a funeral is $8,508, according to the National Funeral Directors Association.
Would your spouse, your children, or your parents be able to afford paying $8,508 out of pocket for a funeral?
If the Federal Reserve report is any indication, they probably could not.
The topics of death and money may be uncomfortable, but the math is simple. If you and your loved ones cannot afford to pay $8,508 for your funeral costs, you might want to consider buying a life insurance policy to help cover the cost.
It is very common for people to try and save money for emergencies, but many end up failing, according to Michael Fulkerson, a senior sales manager for TZ Insurance Solutions.
He said that some people believe they will somehow find the money to pay for an emergency expense.
But to put it bluntly, he said, “that doesn’t happen.”
Not being able to pay for a funeral can create a hard situation, where family members may opt to pool their money together to cover the expense.
“You’re having to scrape that money through multiple channels of family members, and it’s very difficult,” he said.
And if you think that your family can just simply pay using a credit card, you could be wrong.
Credit card limits for new account holders with near prime credit was only $2,277 according to a 2015 article from Credit.com. This means that you’d still owe another $6,231 for a standard funeral.
Fulkerson said some families spend months trying to pool together the money. In the meantime, their loved one’s body may be sitting at the morgue without a burial service.
But there is a way to help protect your loved ones from experiencing this situation. It’s called guaranteed whole life insurance.
Fulkerson said he frequently talks to people who want life insurance coverage because they experienced the situations above first-hand and don’t want it to happen to their family.
A life insurance policy provides some financial support so that your family can focus on grieving and slowly rebuilding their lives, rather than on how they are going to find the money to pay for your funeral.
One type of policy — guaranteed whole life insurance — provides up to $25,000 in coverage that your family can use to help pay for your funeral, living expenses, or other costs.
Coverage starts at $8.80 per month.* Once you buy a policy, your premium will not increase as long as you pay your premiums on time.
Fulkerson said it is easier to budget when you know that your premium will stay the same.
“Knowing and having the security that month in and month out, that’s what I’m going to need to pay to make sure that my family has the financial security and not having to pass the hat or take out a loan … is well worth it.” he said.
Another coverage perk is guaranteed acceptance. If you are between the ages of 45 and 85, your acceptance is guaranteed.
What does that mean exactly?
It means you do not have to answer any medical questions or submit to a medical exam when you apply. You just provide your policy details, contact information, and payment information, and you’re done.
It’s that simple.
In many cases, you can apply for coverage in about 10 minutes and may qualify for same-day approval. Get started now and request a free quote online or call a licensed insurance agent directly at 1-877-647-4570.
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*$8.80/month is for a 45-year-old female seeking a guaranteed whole life insurance policy with a $3,000 face amount. This product has a graded death benefit during the first two years.