Burial/Funeral Insurance for aging parents?

WarEagle84 · July 2014

Hi! I lurk on these boards for tips and advice, but never actually post. But I'm totally confused about life/burial insurance and I can't really find the answers I need on google.

My mom is 68, and in poor health. She has diabetes that is poorly managed, which causes several other health problems. My father passed away 7 years ago, and he was the financial/business planner for the two of them. At the time of his passing, he and my mom both had great life insurance. My mom kept the same policy and it was automatically drafted from her bank account. She switched banks and failed to notify the insurance company. I'm sure they tried to contact her to make sure the policy didn't lapse, but she tends to ignore important mail (I could rant forever about this). So anyways, now she has no life insurance. And there is no way, with all her health issues, that she could get a policy now. My concern is that whenever she passes, the financial burden will fall on me and my siblings to pay for her final expenses. She has money in savings, but I worry that if she ends up having to go to a nursing home, then that will be gone in no time. So my question is, do any of you have experience with burial/funeral insurance? Is it easier to get than regular life insurance? I'm not worried about having a large chunk of money when she passes, I would just rather not have to dip into my own savings for her final expenses. My two sisters are the worst when it comes to savings and spending, so they will be of no help when the time comes. It will be up to my brother and me, and with funerals being so expensive, I don't want it to break us. I see there are several companies that offer this stuff, but I don't want to get ripped off and they somehow end up not paying out what I expected them to.

als1982 · July 2014

So sorry this is something that you're having to deal with. It's life, but it still sucks.

J9lawrence · July 2014

If it was up to me, I would opt to pre-arrange Mom's funeral as opposed to planning on using an insurance policy. I have seen plans that were suppose to cover funeral expenses back out of them by finding some loophole. At least the prearrangement can be made by payments and, in my opinion, is a much safer options.

Please note, that I am a funeral director but work in Canada and our laws/insurance policies are very different from in the States.

blondie42107 · July 2014

I work with the aging population and prepaid funerals are very popular. Life insurance policies can be good too but they are assets and can make a person ineligible for programs, like Medicaid, if nursing home placement/care is needed.

I suggest you speak with the funeral home your mother would likely use, assuming they are reputable, and ask about options.

Wulfgar · July 2014

If your mother is poor with no assets then the nursing home will get her social security and that is it. If she has a home or other property then they can take it.

My parents have had to help with both of my grandmothers on these issues and my mom spent a number of years working as a social worker in nursing homes.

blondie42107 · July 2014

Wulfgar said:
If your mother is poor with no assets then the nursing home will get her social security and that is it. If she has a home or other property then they can take it.

My parents have had to help with both of my grandmothers on these issues and my mom spent a number of years working as a social worker in nursing homes.

This is not true. Not all states have the same Estate Recovery within their Medicaid programs, how they are carried out varies. There are exceptions to the recovery rules.

Wulfgar · July 2014

If the person is over 65, then it is Social Security and Medicare, both Federal programs that are the same or similar in all 50 States. There is a lot that goes into this, but for long nursing home stays, the nursing home usually gets all assets that the person has especially for stays that are over 3 years. That is why if you have a feeling that your loved ones will need to go into a nursing home, it is best to move all of their assets sooner than later or at least that is what all of the National experts on the subject suggest.

I do under stand that some States may have slightly different rules, but that is why if a person has a lot of assets it makes sense to buy long term care insurance in the late 50's. As for burial insurance, $10,000 in coverage shouldn't be too expensive.

MommyLiberty5013 · July 2014

I think this is a reasonable and responsible course of action for you to take.

I think the first step needs to be finding out your mom's wishes for burial as that will dictate much of what needs to be done and paid for in the near term.

I would also advise that you get Power of Attorney for her for financial/legal matters as well as POA for health related things.

These documents can easily be drawn up in your state for a fee from an attorney.

Not sure if you're active, retired, or honorably separated military or not, but you could check out USAA for advice on funeral/burial insurance. I don't know if they offer it, but they may be able to direct you. It's a free credit union type organization for any branch of the U.S. military. You just join it and then can benefit from their products and services.

Erikan73 · July 2014

Another vote for taking care of the arrangments now so it will be paid for & whatever mom wants will be done. Then there will be no burden on you or any of your siblings for pay for it or to have to worry about "what would mom have wanted." Also make sure Mom has a will, if not have her get one ASAP as when she passes if there is no will her property and money will get tied up in probate court as they determine who is the next of kin & who is entitled to what portion of the property. This can take sometime up to two years then for an estate to settle. I experienced this first hand with a friend of mine.

blondie42107 · July 2014

Wulfgar said:
If the person is over 65, then it is Social Security and Medicare, both Federal programs that are the same or similar in all 50 States. There is a lot that goes into this, but for long nursing home stays, the nursing home usually gets all assets that the person has especially for stays that are over 3 years. That is why if you have a feeling that your loved ones will need to go into a nursing home, it is best to move all of their assets sooner than later or at least that is what all of the National experts on the subject suggest.

I do under stand that some States may have slightly different rules, but that is why if a person has a lot of assets it makes sense to buy long term care insurance in the late 50's. As for burial insurance, $10,000 in coverage shouldn't be too expensive.

Estate recovery is only for those that use Medicaid as the form of payment for nursing home placement. The look back in my state is 5 years. If divestment takes place within sixty months of a nursing home admission for long term care, they are penalized - I won't get into the math details but my state breaks it down in to days. So the individual has to private pay until the Medicaid coverage goes into effect. So people need to be very careful on how they "spend down" assets. Also if there is a community spouse, there are options to protect assets. An asset declaration should be completed on the first day of admission.

If someone private pays for long term care, estate recovery has no rights because it's limited to Medicaid only.

Medicare only covers skilled care in a nursing home, not long term care. Social Security has nothing to do with long term care other than it can be used as a form of payment. State workers and employees of USPS don't receive Social Security income as they don't pay into this fund.

If there are any complex situations or considerable assets it's best to seek a good elder care attorney.

Burial/Funeral Insurance for aging parents?

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