Does Workers' Comp Coverage Include Funeral Insurance?
Yes, Workers' Compensation Insurance usually includes funeral coverage as part of its "death benefits," but every state, insurer, and policy has its own provisions and variations. In general, when a work injury causes an employee’s death, these benefits can help…
- Cover funeral and burial expenses.
- Provide financial support for the deceased’s family.
There’s no escaping the fact that workplace accidents can sometimes be fatal. This is especially true in high-risk industries (e.g., mining and oil rigging), which are rife with life-threatening hazards and stringent safety regulations. But seemingly "safe" jobs like office work and retail aren't immune from freak accidents that end in tragedy. As Horace writes in his Odes, “Pale Death with impartial tread beats at the poor man’s cottage door and at the palaces of kings.” In other words, death doesn't discriminate, so it's best to be prepared.
Worker’s Compensation Insurance is one way to do that. When an employee is killed while working, the policy offers support for the employee's dependents, which can help the family move forward.
Worth noting: For death benefits to apply in most states, the employee must have died from a compensable work injury or illness. An on-the-job death caused by goofing around or being intoxicated at work isn't covered. For compensable deaths, benefits go to the employee’s related survivors or the employee’s estate. To learn more about Funeral Insurance outside the workplace, see our blog post “Funeral Insurance, Accident Insurance, & Critical Illness Insurance: Protect Your Business from Worst Case Scenarios.”
That said, let's learn more about death benefits offered by typical Workers' Comp policies.
Funeral Expenses Coverage
Funeral and burial costs are no small expense. In 2015, the National Funeral Directors Association reported that the median cost of a funeral is about $7,181. When including a cemetery burial, that number was closer to $8,508.
Workers’ Comp policies can include, and in some states are required to include, coverage for these costs. Sometimes, the requirement is only up to a certain amount, so it’s not guaranteed to cover all the costs of a funeral, especially if the deceased’s family elects to purchase an expensive casket or entomb their loved one in an elaborate mausoleum. But it is a much-needed relief after an unexpected disaster.
Dependent Support Coverage
In many states, Workers’ Comp is also required to provide cash benefits to the late employee’s family or dependents. Who can receive this money and how much is given depends on the state's law. Here are some things to keep in mind:
- Dependents, such as a spouse, children, or elderly live-in relatives, usually get priority when parsing out benefits.
- Some states have specific requirements for benefit eligibility. For example, to be eligible, children may have to be born in wedlock or a partner must have been legally married to the deceased.
- If there are no eligible dependents, most states require the benefits to go to the deceased’s estate.
The state typically determines the minimum value of the benefit payments. In New York, for instance, the amount is equal to two-thirds of the deceased worker's average weekly wage for the year before the accident. In Oregon, however, the amount is determined by the state’s average weekly wage. These payments may be structured for some time or be paid in a lump sum.
Again, every state has its own Workers' Comp laws, so research the laws in your own state to get a better idea of how death benefits work. Hopefully, you’ll never need to provide them for an employee’s family, but it’s good to be prepared. To get started, take a look at a rundown of each state’s Workers’ Comp Laws.