Should I take out a life insurance policy for my ex-father? My dad is in his mid fifties and doesn’t have the best health. We are not very close. We text once in a while, and I see him maybe twice a year.
He is not married. However, he has been living with the same woman for 12 years. I don’t know how common-law marriages work, so I’m wondering if the funeral costs will go to me rather than her, since I’m her only child.
If so, I’d like to be prepared with a life insurance policy, as I know he doesn’t have one. And if I pursue this, how can I approach my estranged father about it?
-VS.
Dear C.,
You won’t be obligated to pay for your father’s funeral if you don’t sign a contract with a funeral home. But since you’re the only child, you’re probably your father’s next of kin, even though he’s been living with his girlfriend for 12 years. Very few states recognize common law marriage. Even in those that do, it’s rare for a relationship to meet the criteria, no matter how long the couple have lived together.
Suppose you refuse to pay your father’s last expenses. If his estate did not have the money to cover the costs and no one else stepped in to pay, the county coroner or other local agency would likely arrange the burial or cremation. There would be no funeral.
So, before I get to your question about whether to take out life insurance on your father, my question for you is, what do you think you owe him?
I don’t think biology requires you to pay for your dad’s funeral if he was never very involved in your life or did something really egregious. But since you have a relationship, albeit a strained one, I assume you feel responsible.
If you chose to take out a life insurance policy on your father, you would need his consent. But if the goal is only to cover final expenses, I’m not sure buying life insurance is the right decision.
A $10,000 policy for a 55-year-old man would cost between $35 and $55 a month, according to the Lincoln Heritage Life Insurance Co. website. That’s relatively expensive for a small death benefit. Many policies also have a two-year waiting period. This means that if your father died within the first two years, the company would refund the premiums without paying the death benefit.
Before deciding if this makes financial sense, you need to ask your father what estate planning, if any, he has done. It’s not just about who will one day pay for his funeral. As his next of kin, you may have to make medical or financial decisions for him if he becomes incapacitated, unless he has designated someone else to act on his behalf.
There’s no easy way to bring this up, especially since you’re not close. Acknowledging that you are about to discuss something difficult is often a good way to start a difficult conversation. Start by saying something like, “Dad, this is something I really hate to think about, and I’m sure you do.” But it’s important to me that I know what you want if you get sick or die.
Your dad’s poor health doesn’t have to be the main concern. You might say that you are writing a will and it reminds you of your father’s last wishes. (You can lie a little here to make the conversation easier, but even young, healthy adults need an estate plan, so go for it if you haven’t already.)
As morbid as it may sound, it’s entirely reasonable to ask your dad questions such as whether he wants a traditional funeral service, whether he prefers to be buried or cremated, and whether he has enough money on his bank account for this to happen.
The average funeral costs around $9,000, according to the National Funeral Directors Association. But keep in mind that there are plenty of ways to honor someone’s memory for a lot less money. For example, a direct cremation (that is, the person’s remains are immediately cremated without being seen) can cost around $1,000. Then you could have a celebration of life in a place like a park or the person’s favorite bar.
If having an elaborate funeral is important to your dad, maybe you could lay the blame on him. Tell him your funds are limited. In the worst case scenario where he died tomorrow, you would only have $X to spend on a service. You might ask him if he’s ever thought about life insurance. Or if he has decent savings, he could arrange for his bank account to be payable upon your death or to whomever he chooses to take care of the final arrangements.
Talking about death is not easy. But I guess your father is well aware of his own mortality. Understanding what your father wants, as well as your role, will reassure you both.
Robin Hartill is a Certified Financial Planner and Senior Writer at The Penny Hoarder. Send your tricky money questions to [email protected].