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Does the death benefit of the life insurance policy automatically pay for funeral expenses?

Question:
What happens with the funeral expenses when someone dies who has life insurance. Does the death benefit of the life insurance policy automatically pay for funeral expenses?

Jane, Maryland

Answer:
Unless a funeral home was named as a beneficiary of the life insurance policy, or the deceased person bought "preneed" insurance (insurance specifically for funeral expenses), the death benefit of a life insurance policy does not automatically pay for a funeral or other final expenses.

The beneficiary of a life insurance policy is free to use the death benefit in any way he or she sees fit, so while there may be a moral obligation to pay for the funeral of the insured person, there is no legal obligation.

For more information, read Tips for buying pre-need and final expense insurance.

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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.

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