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