Hidden costs of death: What you didn’t know you needed to know
The school of life can teach us a lot of important lessons – including, ironically, about death.
The expenses associated with death are something that most people learn about through experience, which means many of us are unfortunately unprepared for what those costs really look like.
Our research found that Canadians seriously underestimate the range of costs associated with the passing of a family member. As it turns out, there’s much more to pay for besides funeral expenses and household bills.
This lack of knowledge of the hidden cost of death may be why Canadians aren’t proactively planning for what will happen to them after they die. These gaps in understanding contribute to inaction – even as Canadians approach their final years.
The seven hidden costs of death
Let’s break this down. In our survey, 42% were aware of at least four out of seven common death-related expenses. These include:
- Funeral expenses
- Household bills (e.g. utilities, internet, that streaming service they forgot to cancel)
- Credit card and other loan payments (e.g. automobile, personal loans)
- Mortgage/rent payments
- Lawyer’s fees
- Support for children/dependents
- Medical bills (e.g. not covered by insurance)
Funeral prices are costly
While 79% of respondents know they will have a funeral to pay for, four in 10 greatly underestimate how much it will actually cost.
About 73% peg the average cost of a funeral to be less than $5,000. But believe it or not, the average cost of a funeral in Canada is between $8,000 and $9,000.
However, this figure can be even higher if you live in an expensive city like Toronto or far lower if you live in a rural town. Another factor that affects the price is the weather, with winter burials costing more to account for extra resources necessary to break through frozen ground.
Well, 41% were correct in saying that funerals are getting more expensive over time. This is true due to factors like inflation, and unfortunately, death-related costs are not exempt.
The emotional side of hidden costs
Funerals aside, let’s focus on the other hidden costs that can come with the end of a person’s life.
Ilene Shiller, Wellspring Cancer Support Money Matters Program Manager, says that expenses such as medications, medical supplies, alternative therapies, transportation, and parking at the hospital can build up over time and become costly. And while health insurance or government coverage can help, some expenses may only be partially covered and, in some cases, not covered at all.
“In many cases, a life-threatening illness means a loss of income,” Ilene says. “Paired with the many expenses built up over time—the financial impact can be significant.”
Often, the stress of financial situations can be just as difficult as dealing with a life-threatening illness. That can lead to greater financial costs for loved ones, who may need to take time off work or pay for childcare, but also a high emotional cost, too.
How to plan ahead
Since we can’t escape our fate, it’s important for everyone to plan ahead regardless of your current health status:
- Put aside a “rainy day fund” to cover at least three to six months of expenses.
- Make sure you have a will and powers of attorney.
- Ensure you have life insurance in place.
Life insurance and final expenses insurance can be lifesavers when it comes to covering the costs of death. With North Cover Final Expenses Insurance, you can get up to $25,000 to help your family cover funeral costs, unpaid bills, and other final expenses. North Cover Life Insurance can also provide long-term support after you pass on, plus help cover costs if you’re diagnosed with a terminal illness.
Death is an unavoidable part of life, and being prepared for its hidden costs can save your family extra stress during an already difficult time. By understanding these expenses and planning ahead, you can ensure a smoother transition for those left behind. Protecting your loved ones and getting back to what matters most, such as spending time with your family is what you want to be focusing on – give yourself the space to do that!
Jan 4 2024