What Happens If Someone Dies & Has No Life Insurance?

Life insurance is offered to help relieve the financial burden death brings. When a family is mourning the loss of a loved one, money is the last thing to worry about. Unfortunately, families that can't afford the cost of a funeral or unpaid debt can't help but worry. Without life insurance, the family and estate are responsible for paying funeral expenses and debt.

Funeral Expenses

Life insurance policies typically are taken out to help cover the cost of funeral expenses. Without insurance, families are left to pay the expenses. For a family that is struggling financially, it can be a big burden. There is limited financial assistance available for funeral and burial costs. According to the Federal Trade Commission, a traditional funeral, including a casket and vault, costs around $6,000, with many exceeding $10,000.


When a person dies, the estate is responsible for unpaid bills. If a person has assets that aren't protected, such as investment properties or bank accounts without a beneficiary, the assets become subject to probate. Creditors can submit a claim to the probate court for the amount of debt. Before any assets are divided, the debt is paid. Any remaining assets are inherited as declared in a will or specified by state law.

Reimbursement from the Estate

If a person dies without naming beneficiaries on bank accounts, the family may not have access to those funds until the estate goes through the probate process. In some states, probate can take years. A family member can pay for funeral expenses and submit a claim for reimbursement when the estate is probated. Most states consider funeral expenses a top priority.

Assistance from the Social Security Administration

Along with funeral expenses and debt obligations, a family left behind may have a difficult time making ends meet without life insurance money. The Social Security Administration provides the surviving spouse or child a one-time death benefit. At the time of publication, the death benefit is $255. When a person leaves behind a spouse, divorced spouse or dependent children, they may be entitled to receive reoccurring monthly benefits. Survivor benefits are based on the person's earnings prior to death. Anyone who works at least 10 years and pays Social Security taxes is eligible.


About the Author

Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.