The Ghost of Debt after Death

Loved ones still paying burial debt up to 7 years after laying a loved one to rest

Death is inevitable and burying a loved one takes its toll – both emotionally and financially. While the emotional aspect leaves emptiness in our hearts, the financial impact can leave our wallets empty for years if we aren’t prepared.


MetLife® conducted a survey to find out how spouses fare financially following the premature death of their significant other. They found that in the wake of the recession, unsurprisingly, surviving spouses or partners feel less financially secure or ‘not at all financially secure’ a year after their partner’s deaths.

When MetLife first conducted the survey in 2009, 81 percent of surviving spouses said the proceeds from their insurance coverage were sufficient. Today, just 68 percent of spouses/significant others find the proceeds very helpful and that’s only because they have life insurance that represents 3 times the annual incomes of their late spouses or partners. Even those who felt relatively well insured found their insurance coverage insufficient.

Even more striking is the 50 percent of surviving spouses who say they have either ‘completely or somewhat’ recovered financially seven years after burying a loved one. This means that 50 percent of those who buried a loved one seven years ago are still struggling to recover financially. Surviving spouses also say they earn less in today’s economic environment than they did in 2009, which could be why it’s taking them longer to pay down the debt.

These findings are sad but do not surprise Gary Herman, Consolidated Credit’s president.

“If there is one thing in life that we can be sure of it’s that none of us will live forever, so you’d think people would put more effort into planning ahead for what happens once we’re gone – get life insurance, prepare a will, make our wishes known, so that when (not if) we die the task of coming up with funds to cover funeral costs does not fall solely on grieving loved ones. Sadly majority of us don’t, until it hits close to home.”

According to the survey only 49 percent of surviving spouses were involved in selecting their partners’ life insurance policies and values. Just 26 percent of deceased spouses had a will at the time of death. It is important that family members and spouses are involved or at least know the financial benefits that may be at their disposal when the worst happens.

“We tend to avoid talking about our own mortality, but openly discussing how we will financially protect our loved ones has only grown in importance,” Stephen Pontecorvo, senior vice president, MetLife Group Life Products says. “The solution is preemptive action, starting with a discussion with your partner and a little planning – not only about life insurance options, but also about documenting end-of-life wishes, especially through a will.”

Here are a few steps you can take now to decrease the financial burden following the death of a loved one:

  • Three in four deceased had life insurance policies through their employers, according to data from the survey and 71 percent of all insurance proceeds that survivors received came from group policies at work. Find out from your employer if they offer insurance policies and take advantage of it. The automatic deductions from your paycheck will make it easier to make contributions.
  • Enlist the aid of a financial advisor to help you understand the importance of both group and individual policies and to help you draw up a will. Whilst you and your spouse are healthy and able, discuss these matters so that when one passes the other knows about all the financial affairs of the family.
  • Employers, employees need your help. According to the survey they would welcome services like ‘will preparation and grief counseling to help them communicate their wishes and reduce the burden on their loved ones,’ and would also love the opportunity to purchase life insurance through work. Employees, if it isn’t offered endeavor to get covered on your own. Seek the help of a financial advisor or reputable company to help you.

“Everything changes after the death of a loved one. Both our emotional and financial states are compromised,” Herman adds. “While counseling to deal with the emotional stress is essential so is financial counseling especially if the surviving spouse now has to assume the role of handling the household finances or are expecting a windfall. Surviving the death of a spouse is a topic we’ve written about extensively on our website to help spouses identify the steps they need to take before and after the death of a spouse.”

If you’re still paying down burial or funeral debt many years after laying your loved one to rest, it’s time to bury that debt, especially if charges were made with credit cards. Pick up the phone and dial 1-888-294-3130. While we may not be able to take away the emotional burden, we may be able to help you let go of the debt to ease the weight you’ve been left to bear.

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