Getting financial support for end-of-life planning

A lot of us have probably learned the hard way that putting something aside for a rainy day is a smart idea.

Even smarter? Preparing for the costs we know we can’t avoid.

No matter how healthy we are, planning financially for what happens after we go is important. And there’s no doubt that when it comes to end-of-life expenses, a little thinking ahead can make a big difference to the people you love.

What are final expenses?

Final expenses are the costs that your loved ones will need to cover relatively quickly after you pass away. They can add up fast – and paying for it all is probably not a burden you want to put on those you leave behind (especially if you want them to remember you fondly).

A funeral, including burial or cremation, is typically the biggest of those costs. Experts estimate a funeral in Canada to be at least $6,000 to $7,000. Even if the funeral service itself isn’t grandiose, there are typically still costs to transfer a body, get a death certificate, and more.

Wondering how much a funeral costs in Canada? We’ve got it covered.

And if you do imagine the people who you love coming together at a more elaborate gathering, the costs will climb. Flowers, memorial keepsakes, catering costs and more can add to a beautiful experience for the people honouring and celebrating a life – but of course, they also add to the final tab.

End-of-life expenses aren’t limited to funeral costs, either. Your loved ones may have to deal with additional expenses – anything from paying your credit card, electricity and internet bills to car payments to caring for pets you may leave behind.

If that sounds overwhelming, you’re not alone. The good news is, there are ways to manage these costs ahead of time.

Paying for final expenses

Insurance is one way to know your family will have a financial helping hand when they need it most.

Life insurance is designed to replace lost income over time. The total amount you’re covered for may be several years’ worth of your salary, but that also means it often takes a little longer to receive a payout. That can make it difficult to count on for immediate expenses like a funeral. In that case, your loved ones might have to turn to their own bank accounts or credit cards.

Final expenses insurance, on the other hand, is a one-time, lump sum payment that your loved ones can use immediately.

Final expenses insurance usually has a lower coverage amount than life insurance since it’s designed for immediate costs like a funeral. However, that means it’s often easier to get coverage even later in life (whereas affordable life insurance coverage may be harder to get as you age). It also means your loved ones may be able to receive a final expenses insurance claim within a couple of days.

Every person is different, so how you celebrate their life will be, too. Remember that your family or friends may have to take time off work or even travel to help plan your funeral and take care of your final expenses.

In any case, taking steps to protect them from unexpected financial stress can help, and final expenses insurance is one impactful way to do just that.

What is a death benefit in Canada?

It’s worth noting that many people can also plan for their loved ones to receive the Canada Pension Plan (CPP) death benefit from Employment and Social Services Canada. It’s a one-time payment of $2,500 available to eligible CPP contributors.

Most people who work in Canada (outside of Quebec) have made CPP contributions and should be eligible if they’ve contributed for at least three years. There are also survivors’ pensions and benefits for children under 25 available through the CPP.

However, keep in mind that your loved ones would need to apply for those benefits before receiving a financial payment, and that can take six to 12 weeks. That means even if your loved ones apply right away after you pass, they may not get the financial help right when they need it most.

What happens if someone can’t afford a funeral?

Canada does have several programs designed to provide financial support for people who cannot afford to cover end-of-life expenses.

A few examples include:

• Government financial assistance programs: If you can’t afford to pay for end-of-life expenses for a loved one, your municipal, provincial, or territorial government may have financial assistance programs for end-of-life costs. If you need financial support, check the government websites where you live for details on what’s available and who is eligible.
• Financial support for veterans: Veterans Affairs Canada can help pay for funeral and burial costs. The program is delivered through a non-profit organization called the Last Post Fund, and eligibility is based on military service and financial need.
• Financial support for Indigenous peoples: Indigenous Services Canada offers estate services for First Nations living on reserve and some people may qualify for financial assistance for funerals and burials. Northern Affairs Canada (CIRNAC) is responsible, meanwhile, is responsible for estate services for First Nations in the Yukon and Northwest Territories.
• Workers’ compensation benefits: Provincial workers’ compensation boards may also offer financial support for expenses like funerals or burials if a person’s death was related to work illness or injury.