What does the average funeral cost in Canada? See an example of funeral costs and services, and how to pay for it.
Last updated: July 24, 2024 | Reviewed by Catherine Malone
Losing someone is painful enough without extra financial stress. With the right insurance solutions, you can give your family peace of mind when you pass away. Your coverage can help pay for funeral costs so they can focus on honouring your memory.
What is funeral insurance?
Funeral insurance is not a type of insurance you can buy. Rather, the death benefit from a life insurance policy can be used to pay for your funeral when you pass away. You choose an amount for your loved ones to get as a tax-free lump sum payment if you die.
Many people choose an amount between $5,000 to $25,000 to cover basic funeral costs.
Your family can use this benefit to pay for final expenses like:
- Cremation or burial
- Flowers
- Obituary notices
- Clergy honorarium
- Grief counseling
To help ensure your funeral costs are covered, a permanent life insurance policy can be a better option than term life insurance. Permanent life insurance policies last your whole life, while term life insurance expires after a set period.
Why consider life insurance to cover funeral costs?
Guaranteed funds
With a guaranteed death benefit, you know your loved ones will have the funds to cover some or all the funeral costs.
Flexible use of funds
Can be used to pay for anything. Once funeral costs are covered, any leftover money can be used to pay for any other needs that arise.
Tax-free benefit
Your beneficiaries won’t have to pay tax on the death benefit, maximizing the funds available to cover expenses.
Customizable policies
You can choose a policy amount that covers the estimated costs of your funeral and add any additional coverage you want to ensure other expenses are taken care of.
How is it different from a pre-paid funeral plan?
While both pre-paid funeral plans and life insurance can cover funeral expenses, they work differently.
A pre-paid funeral plan is a contract you make with a funeral home. You pay in advance for your funeral arrangements, locking in prices and specific services ahead of time.
A life insurance policy, on the other hand, pays a death benefit. It can be used to cover funeral costs or other needs, offering flexibility in how the funds are spent. You’re also not locked in to a specific funeral home either. Plus, any leftover money can be used for other financial needs.
Basic life insurance options to cover funeral costs
| Features | SunSpectrum Permanent Life II |
Sun Life Go Guaranteed Life Insurance |
|---|---|---|
| How much coverage |
|
|
| When benefits are paid | If you die while your policy is active. | If you die while your policy is active. |
| How benefits are paid | Lump-sum payment. | Lump-sum payment. |
| Why this option may be right for you |
|
|
| More details | More about SunSpectrum Permanent Life II | More about Sun Life Go Guaranteed Life Insurance |
Additional final expenses to consider
Beyond funeral and burial costs, there are other important final expenses to consider after you pass away.
Estate taxes, outstanding debts, medical bills, and legal fees can add up quickly. A more robust permanent life insurance product with higher coverage can help ensure that these costs are covered too.
Protect your loved ones
Find an advisor
Not sure which life insurance product is right for you? A Sun Life advisor can help you find the right plan for your budget.
Enter your postal code to connect with an advisor near you.
Or, get a quote and buy online
If you’re looking for coverage up to $25,000, then you can get a quote and apply online for Sun Life Go Guaranteed Life Insurance.
Frequently Asked Questions
How much does a basic funeral cost in Canada?
In Canada, a traditional funeral and a burial often costs between $10,000 and $20,000.
Cremation ranges from $5,000 to $10,000.
Does the Canadian government help with funeral costs?
In Canada, programs like the Canada Pension Plan (CPP), Workplace Safety and Insurance Board (WSIB), Quebec Pension Plan (QPP), CNESST, and Indigenous and Northern Affairs Canada may cover some expenses. But they likely won’t cover everything and aren’t available to everyone.
Speak with an advisor to learn more about what options are available for you
Can I buy funeral insurance for my parents?
Yes, with your parent’s permission you can apply for a life insurance policy on their behalf to cover their funeral expenses.
What is the difference between funeral insurance vs life insurance?
Funeral insurance is not a type of insurance you can buy. Rather, the death benefit from a life insurance policy can be used to help pay for your funeral when you pass away.
Can I name more than one beneficiary when I buy insurance to cover my funeral costs?
Yes, with life insurance you can name multiple beneficiaries.
If you name more than one primary beneficiary, you can choose the amount of benefit that each beneficiary receives.
Check your specific contract to determine payouts for multiple beneficiaries.
An advisor can help you find the best option to suit your needs
Note: Remember, your death benefit can be used by your beneficiaries however they want. They don’t have to use it to cover your funeral costs or other final expenses. If you want to ensure that your funeral costs and outstanding debts are legally covered, consider naming your estate as a beneficiary. There may be tax consequences for naming your estate as a beneficiary. Talk to your tax advisor to learn more.
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More resources
Tips for planning a funeral
If you have a parent or a partner, chances are you’ll have to plan their funeral one day. These matter-of-fact tips and suggestions can help make a difficult time a little less difficult.
How to hold a family meeting about money
Who would take care of your children if something happened to you? Can your elderly mother still live on her own? It’s time for a family talk.
This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.