It costs money to live, and it costs money to die. Unfortunately, we must factor the cost of dying into our budgets, in addition to housing, groceries, and healthcare. According to the National Bureau of Economic Research, end-of-life responsibilities can cost over $11,000 out-of-pocket — on average, in the final year of life. These expenses can come from many sources, including care facilities, medication, legal expenses, and funeral expenditures.
Many older folks begin to prepare for what they may leave behind because they don’t want to burden loved ones with additional strain during an emotional time. However, the act of dying can come abruptly and without warning, catching families off guard — as they’re not financially prepared for the final expenses.
When we discuss end-of-life care, we’re referring to healthcare practices to address sickness in the final days, months, or years of your life. These measures may include aggressive treatments to cure a disease or injury, or they could focus solely on providing comfort — to minimize pain. Here are some types of care and the typical costs associated with each.
Sometimes unexpected illnesses or injuries occur, requiring hospital care. Typically, more Americans die in hospitals than homes. Those who pass away in a hospital tally $32,300, on average, in their last month. Many deaths happen in intensive care units (ICUs) — where charges can reach up to $10,000 per day.
Palliative care may continue along with traditional healthcare up until you pass away. This type of care centers on stress relief, emotional support, and assistance mitigating symptoms — in an effort to improve overall quality of life. This care has saved patients money on medical costs because it reduces the need for ER trips and hospitalizations. One study concluded that $95.30 per day was the average cost of care for those getting palliative care services.
Once treatment for a terminal illness has ended and there are no other options, the next step is usually hospice care. It can happen in a care facility or at home, with the goal being to manage pain — not extend life. In recent years, over one million Medicare users have spent some time in hospice care, and it has cost an average of $11,800 per patient.
While these end-of-life healthcare expenses seem heavy, most are covered by a combination of private insurance, government entities, or charitable organizations.
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It can be easy to overlook legal expenses. But it’s essential to write a will, specify your wishes, assign power of attorney, and specify burial, cremation, or other arrangements. Your financial advisor or estate planning attorney can help you with the legal documentation. If you don’t have a lawyer or financial planner, try using an online tool like LegalZoom.
Also, it’s best to inform your family and medical team of any end-of-life directives. Preparing the information in advance will spare you and your family of hassles or errors when you need medical care.
Funeral and Burial Costs
You also can’t forget about funeral and burial costs. The National Funeral Directors Association estimates that average funeral expenses linger between $7,000 and $8,000 — although they could be more. This includes viewing services and cremation.
Note: Cremation is usually cheaper than traditional burial.
Consider Final Expense Insurance
So, what can you do to neutralize these funeral costs?
Many older adults buy final expense or burial insurance, which is a small whole life insurance policy with a lump sum death benefit payout. The beneficiary can use the money to pay for funeral expenses (cemetery plot, grave market, etc.) and other final expenses — like outstanding debts that aren’t forgivable upon death. When you buy a policy, you can rest easy knowing that your end-of-life costs will be taken care of.
Talk to Your Loved Ones, Too
If you want to make sure your family or loved ones will follow your burial instructions, you can 1) clarify them in your estate planning documents and 2) discuss them often with family members and friends.
Related Post: Buying Burial Insurance for Your Parents: What to Know
Speak with a Licensed Insurance Agent
Buying final expense insurance is an affordable way to ensure peace of mind. Final Expense Direct offers whole life plans with no medical exam required. Plus, we handle everything right over the phone. Call 1-877-674-0236 to speak with a licensed agent.