When it comes to something as solemn as a funeral, you want to prepare yourself and your loved ones as best as possible. It’s a sad truth, but everyone dies eventually. And when that time comes, you want to ease as much of your loved ones’ stress and grief while you still can. 

In recent years, more people are choosing to pay for their funerals or the funerals of their loved ones well in advance. This practice, known as pre-paid funeral planning, allows you to arrange and pay for a funeral even when it isn’t immediately needed yet. This saves friends and family from the financial stress of planning a funeral, plus gives them ample time and space to grieve. This also allows you to take advantage of locking in today’s pricing.

The average cost of a funeral in the United States can range significantly — typically between $7,000 and $12,000 depending on the services and goods selected, such as the cost of a casket or cremation services. By choosing to pre-pay, individuals often secure lower overall costs for these services compared to future prices, potentially saving hundreds or even thousands of dollars. 

Take note, however, that pre-paying for a funeral is different from purchasing funeral insurance, where a policyholder pays premiums to an insurance company to cover funeral costs upon their death. Local laws vary regarding the regulation of these funds, so it’s crucial to understand regional legislation when considering pre-payment plans.

Final Expense Insurance vs. Prepaid Funerals

When planning for future funeral expenses, two common options are available: final expense insurance and prepaid funeral plans. Final expense insurance provides a death benefit to the beneficiary or a dependant, who can then use the funds given to pay for not just funeral costs, but also medical bills and other end-of-life expenses that have built up. 

On the flip side, a prepaid funeral plan is specifically meant for funeral costs only. It involves selecting specific funeral arrangements in advance, including the venue, catering, type of service (burial or cremation), the container (casket or urn), flowers, transportation, and even the music you want to play! This option not only ensures that your funeral is exactly how you want it to be but also lets you lock in the price before inflation. Prepaid plans could be the ideal choice for those who want to take charge of every detail of their funeral and tailor everything to their preferences. 

The Types of Prepaid Funeral Plans

When considering prepaid funeral plans, there are several options to choose from, which vary in terms of flexibility and control:

• Pre-need Insurance: In this policy, you make payments directly to the funeral home of your choosing and the policy can last up to 10 years. 
• Revocable Trusts: This allows you to set aside money in a trust for the funeral expenses of a trustee. You retain control over the trust and can cancel it, change your beneficiary, or cash out whenever you want. 
• Irrevocable Trusts: Similar to revocable trusts, but cannot be altered or canceled once established. You also can’t cash out any money that you put into the trust. 

What a Prepaid Funeral Plan Covers

Prepaid funeral plans can cover nearly every aspect of funeral planning. These typically include:

• Funeral Director and Staff: Pre-paid funeral plans include payment for the funeral home director and the staff who manage the logistics of the funeral.
• Venue and Catering: This includes facilities for the service, such as the chapel or reception area, and the food for guests.
• Transportation: This includes transportation of the deceased from the place of death to the funeral home, and then to the burial or cremation site.
• Casket or Cremation Urn: You may be able to choose from different materials, such as wood, metal, or glass, or any unique design you want.
• Other Items: These are miscellaneous items such as flowers, obituaries, memorial cards, and special mementos for guests and loved ones.

As you can see, prepaid funeral plans cover practically everything you need for a great funeral service — well, almost. 

Prepaid funeral plans may not include services from third parties, such as celebrant fees, musician fees, clergy honorariums, and burial or cremation permits. Some funeral homes may also exclude cemetery costs, such as reserving the burial plot, opening and closing the grave and designing the headstone.

Cancelling a Prepaid Funeral Plan

The ability to cancel a prepaid funeral plan and receive a refund depends largely on the terms of the contract and local laws. Some plans allow for cancellation within a specific period for a full or partial refund, while others may be non-refundable.

For example, a funeral plan paid with a revocable trust can still be canceled and refunded, but an irrevocable trust doesn’t allow you to cancel your contract.

Why You Should Pre-Pay for a Funeral

If you want to best prepare you and your loved ones for a funeral, then prepaid funeral plans could be for you!

Pre-paying for funerals allows you to lock in lower prices, protecting against inflation and potentially saving more money. It also relieves your family of the pressure of planning and paying for a funeral during a time of mourning. With a plan in place, you can ensure that your funeral goes exactly the way you want it to, providing peace of mind to both you and your loved ones.

Pre-paying for a funeral can be a wise and thoughtful step to take, but we understand that it can be a bit overwhelming. By using resources like AfterlifeHQ, you can get some much-needed help and guidance to explore your options, compare costs, and plan effectively. 

Our comprehensive guides and funeral home directory are designed to make the process as straightforward and stress-free as possible, helping you make the best choices for yourself and your family.

Sources

This article draws on a variety of expert sources and industry data. For detailed information and guidance, consult financial advisors and legal professionals who specialize in estate planning.

• https://www.dignitymemorial.com/pre-planning/funeral-costs/types-of-prepaid-funeral-plans
• https://www.tulipcremation.com/articles/tulip-expert-guides/end-of-life-planning/what-is-the-cost-of-a-prepaid-funeral-plan.html
• https://www.lhlic.com/consumer-resources/how-pre-paid-funeral-plans-work
• https://smartasset.com/estate-planning/prepaid-funeral-plan