When an individual dies without having taken advance funeral planning steps, the options for covering funeral costs are limited. You can pay out of pocket for the burial, look to life insurance policies for help, have the deceased’s estate cover the costs, or ask the entire family to chip in. Many funeral homes also provide a burial payment plan, in which you make regular installments to cover the cost of the funeral in the months (or years) that follow—much like taking out a short-term loan or buying a car on credit.
There is no question that funerals are a heavy expense for anyone to bear. The vast majority of Americans do not have the $5,000 to $10,000 needed to cover all the funeral costs, so it becomes necessary to make alternate arrangements. Before you sign on for that burial payment plan, however, it is a good idea to look at the pros and cons.
Pros of a Burial Plan
- Coming up with thousands of dollars all at once—especially in the face of a tragedy like death—is difficult. A burial plan allows you to break that payment up into smaller, more manageable portions.
- Burial plans have the advantage of being fairly easy to set up and execute. Because they are offered by the funeral home itself (even if they do go through a third-party lender), all you typically have to do is sign paperwork and authorize a credit check—both of which can be done while you are already at the funeral home making arrangements.
- By streamlining the way you pay for a funeral, you may feel free to put your focus on the more important issues of grief. Worrying about covering funeral costs is one of the biggest triggers of stress during this time, and anything you can do to eliminate those worries is a good thing.
Cons of a Burial Plan
- Like any other type of loan, burial plans are almost always dependent on your income and credit levels. If you struggle with finances, you may not be eligible to receive a burial plan—or you may be charged an outrageous amount of interest for the privilege.
- Because funeral homes are businesses first and foremost, they may push a burial plan on you as a way to encourage you to spend more money. As is the case with any kind of funeral plan, it is a good idea to set a budget and stick to it even if you are borrowing the money.
- The financial strain of making a $200+ payment every month could be difficult in the aftermath of a loved one’s death—especially if he or she contributed to your income. Make sure you will be able to cover the payments before you choose this option.
Additional Burial Options
You may feel like a burial payment plan is your only choice, but there are other ways to pay for a funeral. Direct burial, cremation, community assistance, and even body donation are all acceptable alternatives. Before you take out a loan that you may not be able to repay, be sure you weigh all the pros and cons of financing a funeral.