The Average Cost of End of Life Care

From end of life care expenses to funeral costs, it's important to be informed about how much it costs to die and how life insurance can help provide your family with the necessary financial support when that time comes. While end of life care decision making can be challenging, it’s also a form of caregiving in that it can help take the burden off of your loved ones. And on a personal level, it can help create peace of mind for you knowing that should the time come that you fall ill, you’ll be able to focus on spending quality time with loved ones.

What is end of life care?

End of life care, also known as palliative care or hospice care, is a specialized component of healthcare that focuses on providing support and comfort to individuals who are nearing the end of their lives. This type of care is designed to enhance the quality of life for both the patient and their families by addressing physical, emotional, and spiritual needs. 

End of life care is typically provided by a multidisciplinary team of healthcare professionals and may include a range of services tailored to meet the unique needs of each individual.

​​Key components of end of life care can include:

• Pain and symptom management to help the patient live out life more comfortably
• Emotional and psychosocial support for both the patient and their caregivers to cope with the end stages of life
• Spiritual and cultural support to provide another layer of comfort
• Respite care for caregivers to prevent them from experiencing burnout 
• Hospice care once the life expectancy is reduced to just a few months or less
• Bereavement support in the immediate aftermath of the person’s passing

What is the cost of end of life care?

End of life care expenses can reach into the tens of thousands depending on the health situation and how long a person requires care before they pass away. In fact, in 2019, 10% of all healthcare costs in the U.S. were spent on end of life expenses, for a grand total of $365 billion. 

When someone becomes ill with a severe illness, they typically enter palliative care. This step is a precursor to hospice care, which typically begins when there’s a six-month or less life expectancy. Palliative care costs can include things like managing symptoms and pain caused by a disease or chronic illness (such as cancer or heart disease). 

There can be vast variation in the cost of end of life care costs, depending on what type of treatments are done as part of doctor visits or hospitalizations versus at-home care. Your health coverage can play a role in reducing some of the expenses, but if you’re expecting it to cover all end of life expenses, that’s rarely the case. 

Depending on the situation, you should expect substantial out-of-pocket costs for end of life care. For example, Medicare doesn’t always cover at-home palliative care, especially when the individual isn’t in hospice with a limited life expectancy. Additionally, even if your health insurance or Medicare covers some palliative care treatments, you still likely need to pay a deductible and copays, all of which can get more expensive as you age.

Does insurance cover hospice care?

Hospice is another component of end of life care expenses that you may end up needing – and it can be expensive. A patient enters hospice care when a doctor estimates a life expectancy of six months or less. 

The goal is to deliver as much quality of life as possible in those final weeks or months. In addition to managing pain and symptoms, hospice care may also include spiritual support. All of these services could take place either at home or at an inpatient center. One report estimates that the final month in hospice care costs an average of $17,845. How much does hospice cost per day? Estimates range from $150 for at-home care to $500 for inpatient care.

Some hospice care costs are covered by Medicare, including medical services and supplies, physical therapy, short-term inpatient care, and inpatient respite care. However, Medicare does not cover things like room and board or any treatments or drugs aimed at curing the disease. It also doesn’t cover emergency expenses like visits to the ER or ambulance rides.

How much does a funeral cost?

Another thing to think about when making end of life care decisions is your final wishes and what they will cost. The average funeral cost is between $7,000 and $12,000. That can add a huge financial burden onto family members, especially if there’s already been a significant amount of debt accrued from palliative and/or hospice care. Plus, health insurance doesn’t cover any of these end of life expenses.

Here’s a funeral cost breakdown of what typically needs to be paid for:

• Funeral home fee
• Transportation of remains
• Embalming and preparation for viewing or cremation
• Hearse 
• Casket
• Funeral plot
• Flowers
• Memorial service
• Headstone

There can be a lot of price variation depending on the type of services chosen, where you live, and the price level of the items you choose. But suffice it to say, it’s likely that you will spend at least several thousand dollars on final funeral expenses, which is why it’s something that should be factored into your end of life care decision making.

Does life insurance help with end of life expenses?

There are a few ways life insurance can help with end-of-life costs, and it largely depends on the type of policy you have. Insurance policies offered through Ethos allow individuals to apply for either term or whole life insurance. Both offer a lump sum death benefit when the policy holder passes away. Though it can’t be used to help cover palliative or hospice care directly when those needs arise, the money your beneficiaries receive after you die can help settle any outstanding debts that accrued during your illness including medical expenses. 

As for funeral expenses, life insurance is frequently used to cover those. In fact, it’s often one of the key reasons why people choose to get a policy in the first place.

If you decide to use life insurance as part of your end of life care plan, your first big decision will be if you want term life insurance or whole life insurance. Term life insurance is available in amounts ranging from $20,000 to $2 million, with terms ranging from 10 to 30 years. If you’re a senior between ages 66 to 85 and want more financial support during your lifetime, you could consider a whole life insurance policy. With whole life insurance, you’re covered until you die as long as premiums are paid. In addition to the death benefit, your policy accrues a cash value. As you age, you can either withdraw or borrow against your accrued cash value. 

The downside of whole life insurance, however, is that you’ll pay higher premiums and may get a lower benefit amount.

Get ahead of the cost of end of life care

Now that you know the answer to “what is end of life care?” you’re ready to create an end of life care plan. There are several layers to this process, the first of which is thinking through and documenting your end of life wishes and preferences. This can include everything from whether you want to receive hospice care, the desired location for care, and any specific requests regarding medical treatment, as well as your preferred funeral arrangements, if you want to be buried or cremated, etc.

Once you have a good idea of what your end of life care plan looks like, the next step is to think about how to pay for it. Taking out a life insurance policy to help your final wishes be carried out without any financial burden to your family is a popular option. If you’re not sure how to proceed, speak with a financial advisor who can help you make informed decisions about your life insurance coverage needs and overall financial plan.

If you’re ready to open a term or whole life insurance policy, you can get started today with Ethos.

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