The Financial Costs of Dying without Life Insurance


cost of dying without life insurance
Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on email

Table of Contents

Your own death is already going to be hard enough on your family without them having to worry about finances and debt. But that’s exactly what would happen if you ended up dying without life insurance.

Unfortunately, this is a common occurrence. Many people don’t even think of life insurance until it’s too late. This is often because people don’t really understand the full cost of dying (except perhaps the actual “dying” part).

In this article, we want to provide you with an understanding of the potential costs that can arise from death and how life insurance can protect your family from financial loss. We believe that once you understand the cost of dying without life insurance, you’re going to want to get insured ASAP and we can help assist you with that.

Let’s take a look at the cost of dying with no life insurance, so you can understand the true importance of having a life insurance policy before it’s too late.

Expenses After Death Without Life Insurance

As we mentioned, the death of a loved one is rough. Not only emotionally but in most cases also financially.

Below, we will discuss some of the more common scenarios in which families have been financially affected by the loss of a loved one. In all cases, having a life insurance policy can protect your loved ones from these costs that can arise from unexpected death.

Now it’s time to break down exactly what expenses your family and loved ones will be completely responsible for after you die if you don’t have insurance.

Funeral and Burial Expenses

The immediate expenses they’ll need to worry about are funeral and burial expenses. Funerals are expensive. Between the casket, body preparation, services fees, the funeral service, the tombstone, the burial plot, and any extras, the average funeral and burial can cost an estimated $10,000 to $20,000.

Without life insurance, your family would be expected to pay thousands of dollars out of pocket. If they’re unable to pay out of pocket, they might be forced to take out a loan or go into debt to cover the funeral expenses.

Not only will they be completely responsible for these funeral costs, but they’ll also have to pay for their own travel to get to the funeral. This would be the case for grown children who may be living in a different state from their parents.

Covering these expenses with life insurance can easily be done with almost any type of life insurance policy. However, one type specifically designed for this type of insurance need would be a final expense life insurance policy.

Final expense life insurance policies are smaller whole life insurance policies. When we say smaller, the death benefit is generally $25,000 to $50,000 at most. They are specifically purchased with the intent to cover burial expenses, as well as, any small remaining final expenses.

Final expense life insurance is also a great life insurance option for seniors, as they don’t require a medical exam, and are quite easy to apply for when it comes to the application process.

Replacing Lost Income (Deceased Spouse)

A large portion of life insurance policies are purchased by families as a way to provide financial support to their surviving spouse, should one of them pass away.

The reason for this is generally because they have children or even other family members that would depend on their income if they were to suddenly pass away.

If you currently don’t have a life insurance policy, try to think about how much of your current income contributes to your family’s current lifestyle.

Here is a list of some of the most common family expenses.

  • Mortgage
  • Utilities
  • Auto
  • Grocery
  • Child Care
  • Clothing
  • Medical/Dental
  • Maintenance (Home/Auto)
  • Bills
  • Gifts (Holiday/ Birthday)

As hard as it is to imagine a loved one dying, a life insurance policy is the best way to provide financial protection to the family. The death benefit from a life insurance policy provides immediate tax-deferred funds that can be used to maintain their current lifestyle.

What type of life insurance should a family purchase?

For most family’s, a simple term life insurance policy will be the best choice.

Term insurance is the most affordable of all types of life insurance coverage. Because of its affordability, most families are able to purchase enough life insurance coverage to cover all of their financial needs.

Term insurance provides temporary life insurance coverage for a set duration of time, known as contract lengths. These contract lengths are usually available in 10, 15, 20, 25, 30, 35 and even 40 years. When approved for a policy, the rate will be guaranteed to remain the same price for the duration of the contract.

How much life insurance do I need for my family?

Determining the correct amount of life insurance can be tricky and will vary from family to family.

There are several ways to choose an appropriate amount whether it’s using an online life insurance calculator or with the help of an actual life insurance agent.

If you’re in the early stages and are wanting a rough idea of cost, then a good starting point will be to start with your annual income. Many life insurance experts say that the rule of thumb is at least 10x your annual income.

For younger families with small children, you can even consider up to 25x your annual income.

For example, if your annual income before taxes is $50,000, multiply this amount by 10. The total amount of coverage would equal to $500,000.

Again, this is good to use as a starting point to help determine a death benefit amount. A life insurance agent can always help if needed.

Lost Wages (Living Spouse)

Dying without life insurance can also have a large impact on the living spouse’s ability to financially earn an income as well.

Many people find they have to take significant time off work not only to plan the funeral but also to process the loss of a loved one. While some workplaces do factor in grievance time, some may not.

Even workplaces that do have bereavement time usually have a certain limit on how many days are included in this time. Not everyone grieves in the same way or in a certain amount of time; if more days off are needed, most people will be out of luck in terms of their workplace understanding or at least continuing to pay them for time off.

This could also force your family members to go back to work sooner than they should or sooner than they are emotionally able to. The loss of a loved one is a serious and traumatic event. It usually requires a grieving process to be able to function in society again.

Being forced to go back to work too early because of financial obligations can be emotionally taxing, and even traumatic, for close family members and loved ones.

Your loved ones could lose days or weeks of wages after your death. Many life insurance policies will help cover lost wages for loved ones and close relatives after your death. However, dying without life insurance means your loved one’s lost wages won’t be covered.

Counseling Expenses

The loss of a loved one is, as we’ve said, a traumatic experience. Many people find they need therapy or counseling in order to work through the many emotions that come up after the death of a loved one.

Not all health insurance covers therapy, and it can be quite expensive to pay out of pocket. Many life insurance policies will cover counseling for family members after your death.

But without life insurance coverage, your family and loved ones will be responsible for counseling costs.


Without life insurance, any debt that you owe will be transferred to your family members. This could include taxes, student loans, credit card debt, and any other money you owed before your death.

Another potential debt to consider is medical debt. Even the best health insurance policies have limits on how much they will cover. If a loved one’s death is health-related, medical expenses can become overwhelming fast.

This is just another way life insurance can help provide funds to pay for those expenses.

Did you know that many life insurance policies now come with a new feature called living benefits? A life insurance policy with living benefits allows the insured early access to the death benefit should they become sick with one of several qualifying illnesses.

Having a life insurance policy with living benefits can not only provide death benefit protection to the family but also provide funds to help pay for expenses or be used as income while the insured sick.

Why Planning Ahead Is Important

As you can see, dying without life insurance can cause severe financial devastation to a family. All of the things we’ve mentioned can add up to tens of thousands of dollars that most families probably don’t have on hand.

If you planned ahead and had a life insurance policy, your family members and loved ones would be protected from these expenses and be able to focus on grieving the loss instead of focusing on how to pay back your debts.

Not only will your family be worried about paying all of these expenses, but they also won’t be able to properly grieve the loss. Without the freedom to take time off work or get the counseling they need, their lives are going to be much harder than they need to be after you’re gone.

A life insurance policy is truly an affordable way to financially protect your family from the worst-case scenario. In most cases you will see that your monthly life insurance payment could be cheaper than that new Fortnite skin your child must have, eating out at a restaurant or even the cost of a new pair of shoes.

Getting the Best Kind of Life Insurance

Purchasing life insurance can be very simple and in many cases a fast process when done right. It can be a little overwhelming to do it on your own so please be sure to ask for help.

Another tip when considering life insurance is to work with an independent agent or agency such as Top Quote Life Insurance.

Most independent agencies can not only offer you multiple coverage options but also shop your coverage with multiple insurance companies to get you the best rate for you and your family’s life insurance needs.

Understanding which life insurance policies will cover all of the things we went over in this article is crucial when choosing which one is right for you and your family.

Dying without life insurance can leave your family with debt and expenses that they shouldn’t need to be worrying about. Getting life insurance that will protect and support your family after you’re gone is going to make their lives easier as they deal with a tough loss.

If you have any other questions about life insurance coverage or would like some sample rates, please don’t hesitate to contact us for assistance.

Ready to Compare Life Insurance Rates?

It’s free, fast and super simple.

Jeffrey Manola

Jeffrey Manola

Jeffrey Manola is an experienced life insurance agent and the founder of Top Quote Life Insurance. His mission when he created Top Quote Life Insurance was to provide online consumers searching for life insurance with the absolute best quotes for term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance.

Not only does he strive to provide you with the best rates for your life insurance coverage, but he also wants you to be well informed about the different types of life insurance options that are available. You will also find a significant amount of valuable information on the multiple life insurance companies that can provide you with coverage.

Jeffrey Manola is licensed to provide expert advice and help aid in the purchasing process of life insurance products. He is licensed with the National Insurance Producer Registry (NIPR) in the following states:

AL: 790866 AR: 14358927 AZ: 14358927 CA: 0K29801 CO: 531038 CT: 002536246 DC: 3000281706 DE: 3000190912 FL: W383615 GA: 3089339 HI: 482421 IA: 14358927 ID: 646048 IL: 14358927 IN: 3100885 KS: 14358927 KY: DOI-986908 LA: 758187 MA: 2045330 MD: 3000011601 ME: PRN252004 MI: 14358927 MN: 40427014 MO: 8428106 MS: 10519253 NC: 14358927 ND: 14358927 NE: 14358927 NH: 2434852 NJ: 1562332 NM: 14358927 NV: 3299018 NY: LB-1484031 OH: 1117369 OK: 100293583 OR: 14358927 PA: 740709 RI: 3000183893 SC: 14358927 TN: 2383399 TX: 1969337 UT: 648983 VA: 987464 VT: 3426230 WA: 947010 WI: 14358927 WV: 14358927

Never hesitate to reach out to Jeffrey if you need help. Top Quote Life Insurance is more than just an online quoting agency. We want to help you save money, protect your future, and earn your trust (888) 777-7574.

More Articles Written by Jeffrey Manola

Ready to Shop for Great
Life Insurance Rates?

Purchasing Life Insurance has never been easier

Or give us a call...888-777-7574

Ready to Shop for Great
Life Insurance Rates?

Purchasing Life Insurance has never been easier

Or give us a call...888-777-7574