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December 13, 2012 at 12:25 AM
In 1999, the youngest baby boomer was 35 years old, and the oldest was 53. Starting in January 2011, more than 10,000 individuals a day will be turning 65 years of age. During the next 20 years, this mass of people will need a whole range of financial protection products. The four primary concerns for these 76 million baby boomers will be:
- Doctors expense
- Hospital expense
- Prescription
- Recovering at home after a procedure or not leaving a financial burden to their family/leaving a legacy. (This is where final expense insurance comes in.)
There are two financial hazards for seniors;
- Final expense gap
- Reduced income
See also: Final flight with final expense
Where will they get money for final expense?
- Borrow
- Cash
- Family
- Insurance for final expense
Pre-Funeral Home Expenses
- Ambulance
- Paramedical fees
- Hospital emergency room charges
- Physicians’ fees
- And other expenses
To pay for these predictable expenses doesn’t it make sense to use discounted dollars?
An estimate of final expenses today is between $6,000 and $15,000.
The cost of a regular adult funeral includes the following basic items, which does not include cemetery, monument/marker costs or miscellaneous cash advance charges such as for flowers or obituaries:
| Item |
Price* |
| Non-declinable basic services fee |
$1,817 |
| Removal/transfer of remains to funeral home |
$250 |
| Embalming |
$628 |
| Other preparation of the body |
$200 |
| Use of facilities/staff for viewing |
$395 |
| Use of facilities/staff for funeral ceremony |
$450 |
| Use of a hearse |
$275 |
| Use of a service car/van |
$125 |
| Basic memorial printed package |
$125 |
| Subtotal without Casket: |
$4,265 |
| Metal Casket |
$2,295 |
| AVERAGE COST OF A FUNERAL |
$6,560 |
| Vault |
$1,195 |
| Total Cost of a Funeral with Vault |
$7,755 |
And funeral prices just keep rising.
| Year |
Cost of an Adult Funeral |
| 1960 |
$708 |
| 1965 |
$790 |
| 1971 |
$983 |
| 1975 |
$1285 |
| 1980 |
$1809 |
| 1985 |
$2737 |
| 1991 |
$3742 |
| 1995 |
$4626 |
| 2000 |
$5180 |
| 2006 |
$6195 |
Source: 2010 NFDA General Price List Survey. (Note: This survey is not conducted annually; 2009 is the most recent year for which NFDA has data.)
After funeral expenses
- Probate & miscellaneous estate costs
- Expenses
- Unpaid debts
So how do you address this need in such a growing market? It’s not so much a sales script as asking questions and getting them to think.
1. Have you ever been responsible for making funeral/cemetery/cremation arrangements when someone died? How did it go for you? Did it create any financial problems?
2. Who will be responsible for your arrangements upon your death? Is that person financially prepared for such an emergency?
3. Do you have any children/grandchildren/a favorite charity that you would like to leave money to upon your death?
4. Upon your death, does your spouse have enough savings to protect against the immediate loss of your income?
5. How much do you expect your funeral expenses to cost if you died today? How much do you think the same arrangements would cost if you lived to age 80 or 90? (Use an inflation calculator to figure this out. If someone is 65 today and would have an $8,500 funeral at today’s price, that projects to $18,624 if they live to age 85 and $27,568 if they live to age 95, figuring 4 percent annual inflation.)
6. Do you realize your bank accounts and assets are not available to your children immediately upon your death? (Unless you have a joint account, which opens up a whole other set of problems.)
