How Does Life Insurance Pay For Funeral Expenses? 
Life insurance pays the face amount to the beneficiary who can then use the money to pay for the funeral expenses . You can also sign over the policy to the funeral home and the company would pay the funeral home directly . How you choose to set it up depends on the circumstances and size of he policy . If you or your loved one is in poor health and may be going into a nursing home a good agent familiar with Medicaid laws can help you make the right choice and provide options that will protect you from Medicaid spend down . A younger person with a large face amount would want to make his spouse or trust the beneficiary . Again , a good agent can help set this up for you . 