Hello Lajr56,
Good question... Insurance does not always immediately pay off, on the contrary. While it might pay in the future, there is still the need to cover immediate costs. There are many who would, in care and concern (thinking you were a victim of a terrible crime against your family), chip in to assist on covering things -- so they do.
BTW, dealing with the loss of 3 family members all at once, even if you got some type of discount would probably be fairly expensive (I would be very interested in the local funeral bill in Chester.) One of my High School classmates is one of the local funeral home owners where we are, and has always been very forthright in answering my questions -- there are costs that must be paid for so many things, businesses cannot just give their work away or they cannot stay in business. Even if they felt impelled to do things at cost, I can't imagine that the handling of 3 deceased with coffins, vaults, plots (a cost at the local cemetery), etc. would be cheap.
Later on, if/when a life insurance policy pays off, it certainly seems like a person "might" consider contacting those who helped early on saying, "You helped me when I was hurting and didn't have the money to pay for 3 funerals, may I now pay you back?" Many would never accept that...they gifted from their hearts. On the other hand, I suppose it is possible that a funeral director, if you were very close to them, could look at a life insurance policy/policies and say -- I'll give you credit. It is kinda left to the business person, I might guess. And I might guess that the funeral director would be looking at the situation as well -- were this a car accident, where the last family member were away, I would say the whole situation would be completely different than looking at a situation where a guy who said he went to the gym, leaving a sleeping family, only to come back an hour and 8 minutes later to finding them all strangled. But, who knows...
A friend of mine once asked me for a suggestion about the monetary gift they should take to a particular funeral (a murder victim, their ex-husband), i.e. this was in their religious training -- it was customary to assist the bereaved family financially. I had never heard of that, but would certainly have been open to it, I just had never heard of this being some type of custom or "set" type of requirement. To me, attending a funeral is paying "respect" and showing love for the deceased -- I might send flowers/card or contribute to something on their behalf, but I have never felt that I am required to do anything, much less help pay the bills of anyone else (nor do I feel that anyone is required to help pay my bills). No one who has ever invited me to a funeral ever had any ulterior motive in inviting except to pay respect -- at least, I have never felt that. If I did anything to help the person pay bills, that would be completely voluntary -- I have NEVER felt pressured, and if I was, it would not be acceptable to me.
I do not find it entirely odd that a "bereavement" collection might be taken (I certainly wouldn't if it was a car accident, especially with mom and 2 children dying). People's hearts are generally very open at such great losses as that of a friend/s and/or loved one/s -- and aching for themselves and the relatives. I think that, however, IF there was a death or a set of deaths with any kind of cloud of suspicion it might be extremely unwise and odd to move in the direction of taking a collection. At anyrate, I have NEVER been to a funeral where a collection plate was passed.
IF anyone in my family passed away, I would BALK at anyone's suggestion of the discomfort of a collection plate being passed at their funeral or memorial service. IN FACT, at the churches where we go, there is no plate passed generally, that has generally been done away with, it would be HUGELY rare. The pastor might feel to let those who do not know that there is a box at the back of the church for gifting, should anyone feel impelled for any purpose. I love this -- people are left to follow their hearts -- they can gift at the box, or they can call the church office to gift.