This week's insurance 101 will be covering the first factor in deciding total life insurance needs. The dreaded Final Expense Costs.
I know I know....Nobody wants to think about these things let alone plan them out...But leaving the correct amount of money behind for you loved ones is one of the best gifts you can leave them.
Final Expense Fund Final expenses are just what they sound like - charges to surviving family members following one member’s death. These expenses usually come from:
1.) Funeral and burial costs - Around $7,000
2.) Doctors and hospital bills - Average cost if you pass away in a hospital is $26,000
3.) Administrative costs, such as probate costs, attorney fees, appraisers fees, tax return preparation, court costs, and possible executor’s fees must also be anticipated - A ballpark range is 2%-7% of the value of your estate. If you have a $300K estate, for example, the probate expenses may be anywhere from $6K to $21K depending on where you are and how easy or complex your estate is.
One additional area deals with Federal Estate Tax. This is a highly complex area and I will not be covering it. Information on Federal Estate Tax is found on the IRS website.
As you can see there are a lot of fees and charges related to your final expenses. If you don't have anything in place to pay for these things beforehand your loved ones are going to be on the hook for the bills.
As always, if you have any questions about this or any other insurance topic please feel free to e-mail me anytime at firstname.lastname@example.org