“Why should I prearrange? I have insurance to cover my funeral”

Written by admin. Posted in Senior Living

Published on July 02, 2014 with No Comments

If you haven’t said it, let’s face it, you have at least thought it. The above conversation came over lunch with a friend recently.

“Come on, Dan.  All you guys want to do is sell graves and stuff.  Why should I prearrange?  I have insurance to cover my funeral.”

If you haven’t said it, let’s face it, you have at least thought it.  The above conversation came over lunch with a friend recently.  I’ll call him Jim, a fictitious name, and I will share the essence of our conversation as we munched on our fries and drank our Cokes.

“Is that why you bought your insurance, to pay for your funeral?” I asked.

“Well, no.  But I have plenty of insurance so my wife and kids will be ok when I die,” answered Jim.

“It’s none of my business, but I’ll ask anyway.  How much insurance will your family receive when you kick the bucket?”  I mentioned that we are friends, right.  I would not talk about kicking the bucket with anyone but a close friend.  It is pretty hard for Jim and me to succeed at insulting each other after all the years we have been friends.

“You are right, it’s none of your business, but I will tell you anyway.  They’ll get 250,000 big ones.  That ought to hold them over for a while.  Even after all my final expenses, my wife will still have a chunk of change left over,” said Jim.  “She always jokes that when I die, she’ll probably run off with her travel agent.  At least I hope she’s joking when she says that.”

“First, Jim, have you ever sat down and done the math on the suitcase full of cash you plan on leaving them, provided the insurance is still in place when you die?”

“What do you mean, still in place?”

“I see it every day, Jim.  People come in thinking that they have insurance, and it was either borrowed on for some valid reason, or it was a term policy that did not get renewed, or they got too old for it to be cost efficient to be continued.  Many people over 65 think that they have insurance and find out too late that it’s not there when they need it.”

“Well, it is there now, so what is this math thing you mentioned?”

“Look at all your expenses as they are today and divide them into your $250,000 and you will see how long the money will last.  I congratulate you, Jim, because most people that come in with a valid insurance policy when a spouse dies have, on average, $50,000 worth of insurance.  Then they want these big, fancy funerals and $12 – $15,000 is used up immediately to bury the husband or wife.  Another chunk of the money goes to prearranging for the remaining spouse and very little is left to live on,” I said.

“Wow!  When you break it down, the way we spend money, there would only be enough for my wife and kids to live the way we do now for…I don’t know…maybe four years, five if you factor in the money they won’t be spending on me anymore.  And that is right about when my little one will be going to college!”

I took another bite of my burger and sat for a minute thinking.  This was a friend, and I never wanted to bother him with buying cemetery property, but this looked like a good time to bring it up.

“Jim, I don’t know if you know it, and shame on me if you don’t, but we have a free grave space for you and Carol worth $1,000 at Calumet Park.  Or, you could use the $1,000 as a credit toward something of greater value here at the cemetery.  I’d like to sit down with you two sometime in the near future and explain all that is involved in making arrangements.  A lot of the benefits to you have nothing to do with saving money.  Of course, you are such a cheap son-of-a-gun that I know you like saving money.”

“Hey, hey now!  I was going to treat lunch today, but…”

“Just kidding, Jim.  But seriously, people do this; make prearrangements for their cemetery and funeral needs, every day.  I have yet to have any person in 20 plus years of doing this work where a person came in after burying a wife, or husband or child and said I wish I wouldn’t have prearranged.  By way of contrast, I have had a lot of people tell me they wish they would have made advance arrangements instead of waiting until it was too late.  Just to know for sure what a wife would have wanted would have been worth it.”

“I know.  Every time Carol tells me about one of my old classmates who have died, we think we should do something, but who wants to talk about death?”

“Jim, I am in the business and I don’t want to talk about death.  I look at my job as doing the best I can to help people through a couple of the worst days of their lives.  It really does make me sad when they can’t afford to do what they really would like to do because they thought they had it covered with their insurance.  Even the wealthiest person has to meet with a funeral director and a cemetery person to make arrangements when someone they are responsible for dies.”

“Let me ask you, Dan, how much does an average funeral cost?  I remember when my mother died, she had a couple of days at a funeral home, then we went to church, then out to the cemetery.  How much does something like that cost?”

“Everybody is different. But, the average last year was around $12,000 for one person.  You can spend as much as you want, but that was the average.  What your mom had is what is called a traditional funeral, and prices can be all over the place due to casket choices, type of vault, and what cemetery is chosen, and where in the chosen cemetery someone decides upon.  We have graves for as little as $1,000 and as much as $19,500.  And Jim, if you and Carol decide on some other cemetery than Calumet Park, you can still use our funeral home.”

“You gotta be kidding?  $19,500 for one grave?”

“Jim, it is like they always say in real estate about the three things that make the price what it is.  Location – location – location”

“For $19,500 I would want a view of the Swiss Alps as a backdrop to my $19,500 grave and I would want the Beatles singing ‘When I’m 64’ at my funeral.  And I mean all of the Beatles.  Reincarnate or clone, but get me the Beatles. ”

“That’s why a lot of people pre-need.  They want to make an intelligent choice and not be at the mercy of an unscrupulous grave salesman when they are forced to buy out of immediate need.  You would be surprised how many times people overspend due to feelings of guilt.  Maybe they just had a fight and the wife drives off and is not paying attention and is slammed by a train.  Or a husband feels bad that he didn’t pay enough attention to his wife when she was alive.  And the worst to me is when a child dies and they both go overboard on funeral costs.”

“I guess I can see how that might happen.  I cannot imagine what I would do if something happened to one of my kids.”

“Jim, I remember one lady whose husband took a trip to Colorado.  He liked the mountains and she didn’t, so once a year he would go to the Rockies to refresh himself.  Anyway, he was killed by some random bad guys.  After the funeral, she gave some of the insurance money to family for a down payment on a house, she bought lots of jewelry, she gave a bunch of money to the ASPCA and guess what?  She was broke within a year and couldn’t even manage the price of the grave next to her husband.  Jim, I asked her why she spent all the money that her husband made sure she would get from insurance in case he died first and guess what her answer was.”

“I don’t have any idea.  What did she say?”

“She said that she would not have had the money if her husband had not been killed.  To her, it was blood money and she only wanted her husband back.  And get this; she was blaming herself for his death for not going to the mountains with him!  She felt that he probably would not have been murdered if she was with him.”

“Ouch!  OK, listen, let me talk to Carol and we will set up a time to sit and talk with you.  It can’t hurt to at least find out what we both would want and how much it will set us back.  You know that I just started the new job.  Do you have a payment program?”

“Jim, I prefer to think of prearranging as a great investment that increases in value the longer you live.  And the good part is Uncle Sam doesn’t get to collect a penny of tax on the higher value when you die.  I know you did a bankruptcy a couple of years ago, Jim.  It doesn’t matter.  Everyone is approved for our zero interest financing, so all you need is 10 percent down and we’ll send you a payment book.  In fact, if you can’t do everything at once, we can do a little at a time until everything is taken care of.”

Just then the waitress came over with the check and as I live and breathe, Jim picked up the tab.  We never did get to talk about the Cubs and their constant lousy team or the Bears upcoming season, but I think we had one of the best talks ever.  Seldom do Jim and I get beyond surface conversation but this day was a good day for us; and for his family as he now understands that insurance is for the living, not to be spent on the deceased.

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