Final Expense Planning: 7 Gaps Families Often Miss

Final Expenses Part 3: Does Your Plan Actually Work?

By Better Family Legacy Insurance  |  Serving seniors and families across Georgia, Texas, Alabama, South Carolina, Louisiana, and beyond

In Part One of this series, we looked at what final expenses actually include. In Part Two, we walked through five conversations every family should have. This article is Part Three, and it asks a harder question: even if you have a plan, does it actually work?

Having a final expense plan is not the same as having a final expense plan that works.

Many families believe they are prepared. They have a life insurance policy, some savings, or a prepaid arrangement. But when the time comes, the plan falls apart, not because it did not exist, but because of things I will refer to as gaps throughout this article that they never thought to check.

This article is not about starting over. It is about reviewing what you already have and making sure it can actually do what you need it to do.

Gap 1: The Policy Exists, but Nobody Knows Where It Is

A life insurance policy your family cannot find can delay a claim and make an already difficult process harder. This happens more often than most people realize.

Someone purchased a policy decades ago, filed it away, and never mentioned it again. The family knows insurance exists but has no idea which company it is with, whether that company still exists, what the policy number is, or whether it is still active.

The fix is simple:

•       Write down the name of the insurance company and the policy number

•       Store that information somewhere a trusted person can find it

•       Tell at least one person where to look

If you are not sure whether an old policy is still active, contact the insurance company directly. Even if you can't find the policy, but you know the insurance company's name, they can confirm the status and walk you through your options.

Gap 2: Your Family May Know Money Exists Without Knowing How to Access It

I had a client who was debating whether to get a final expense policy. She told me she already had enough money in her accounts to cover her funeral. She did not see the need.

I asked her one question: "Who has access to that account besides you?"

Could her husband get into it? Could her daughter, the one who would likely be handling the arrangements, access it if something happened?

She said no. And she did not want them to have access now.

She got a final expense policy.

Having money set aside is not the same as having money that can be reached when it is needed. Depending on how an account is titled and the circumstances, a family may not be able to access those funds immediately after a death.

Ask yourself:

•       Does anyone else have access to your accounts right now?

•       Would that access still work after your passing?

•       Is there another way to make funds available quickly without creating legal complications?

A life insurance death benefit is paid directly to the named beneficiary after an approved claim. How long that takes varies by the company and the circumstances of the claim.

Gap 3: The Beneficiary Information Is Outdated or Incomplete

A life insurance policy pays the person named as the beneficiary, not necessarily the person the policyholder intended to receive the money.

If a beneficiary designation has not been updated after a divorce, a death in the family, or a change in relationships, the money may go somewhere the policyholder never intended. Do not assume that changing your will automatically changes the beneficiary listed on your life insurance policy.

Check your policies for:

•       The name of the primary beneficiary

•       Whether a contingent beneficiary is named in case the primary is not available

•       Whether the information reflects your current wishes

This is one of the most common issues I come across, but it is something easy to fix. Find your policy, give your insurance company a quick call to confirm who is currently listed. They can help you make a change if needed.

Gap 4: The Coverage Amount No Longer Matches the Cost

A policy purchased years ago may have been the right coverage amount at the time. But funeral and burial costs, just like everything else, continue to go up. A coverage amount that felt adequate a decade ago may fall short today.

According to the National Funeral Directors Association's 2023 study, the national median cost of a funeral with viewing and burial was $8,300. That figure does not include every possible cemetery, monument, or other separate expense.

It is worth looking at what your current coverage would actually cover and whether there is a gap between that amount and what your family might realistically face.

Gap 5: A Prepaid Arrangement May Leave a Balance

Prepaid funeral arrangements can be a useful way to document your wishes and lock in certain prices. But they are not always as complete as they appear.

If a prepaid arrangement is not fully paid or does not guarantee all prices, the family could still face a balance or additional charges. The contract determines what happens. That balance can be a surprise at an already difficult moment.

If you have a prepaid arrangement, confirm:

•       What is still owed on the contract

•       Which items are covered and which are not

•       Whether prices are guaranteed or subject to change

•       Whether the plan is transferable if you move

And make sure someone in your family knows this arrangement exists and where to find the contract.

Gap 6: Employer or Group Coverage That Ends at Retirement

Many people have life insurance through their employer and assume it will continue after they retire. Employer or group life insurance may end, decrease, or offer continuation or conversion options when employment ends or you retire. The rules depend on the specific plan.

If you are retired or approaching retirement, check whether any employer or group-life insurance you have is still active and what the current coverage amount is. Do not assume the coverage you had while working is still in place.

Gap 7: The Plan Has Never Been Reviewed

A plan that was put in place years ago and never reviewed may have gaps that have grown over time. Life changes. Relationships change. Costs change. What worked before may not work now.

A review does not have to be complicated. It can be as simple as sitting down with your documents, checking the basic information, and asking whether anything has changed since the plan was last set up.

A Simple Review Checklist

Here are some questions to ask when reviewing your plan:

1. Can someone find your life insurance policy information quickly?
2. Does someone you trust have access to the funds that would cover your final expenses?
3. Are your beneficiary designations current and do they reflect your wishes?
4. Is your coverage amount still enough to cover today's costs?
5. If you have a prepaid arrangement, do you know what is still owed?
6. Is any employer or group coverage still active?
7. When did you last review your plan?

You do not have to fix everything today. Pick one area, review it, and go from there. A plan that gets reviewed regularly is far more likely to work when it is needed.

A Note From Me

The client I mentioned earlier did not think she needed a final expense policy. She thought she had it covered. One question changed her mind, not because I was trying to sell her something, but because she had never thought about who could get to the money in her accounts before.

That is what a review is for. Not to uncover failure. To close gaps before they become problems.

If you would like help reviewing your current coverage or understanding your options, reach out. I do free policy reviews with no pressure. Just honest information so you can make the best decision for your family.

Send me a message at info@betterfamilylegacy.com or drop a comment below.

Coming next in the Final Expense Series, Part Four: The Beneficiary Designation Problem. Why the name on that form matters more than most people realize, and what happens when it has not been updated.

Peace comes from knowing, not guessing.

This article is for general educational purposes only. It is not individualized legal, financial, estate-planning, or insurance advice. Consult the appropriate licensed professional regarding your specific circumstances.

Related Better Family Legacy Articles

•       Final Expenses Part 1: Understanding Final Expenses — What Families Need to Prepare For

•       Final Expenses Part 2: 5 Conversations Every Family Should Have About Final Expenses

•       Why Government Benefits Alone May Not Be Enough for Final Expenses

Better Family Legacy Insurance  |  Licensed in Georgia, Texas, Alabama, Arkansas, South Carolina, Louisiana, and more  |  betterfamilylegacy.com