Ways to Pre-Pay for a Funeral

Funeral planning options The high costs of a modern funeral, which can range anywhere from a few thousand to over ten thousand dollars, often turn the burial process into an even more complicated and heartrending affair than it already is.

If you’re interested in learning more about the funeral planning process as way to protect your loved ones for years to come, there are some great resources out there. As more and more people turn to pre-need funeral planning, more options reach the market and allow for greater choices and lower costs than ever before.

• One way to plan for the financial ramifications of a funeral is to buy funeral or burial insurance. These policies act much like life insurance, offering anywhere from $2,000 to $20,000 in coverage. Although most people purchase these policies with an eye to paying for a funeral, the funds are usually freed up after death, and the beneficiary can use the money any way he or she wants.

Many funeral homes offer their own version of burial insurance. Although the insurance is typically offered through a third-party insurance broker, these policies are tied to the products and services offered by that particular funeral home, as well as affiliated organizations like florists, clergy members, or even cemeteries either attached to or near the funeral home. For this reason, it’s important to choose a funeral home you like and trust, as well as one that is located in the city you wish to be buried, since the funds may not be available should your funeral be moved elsewhere.

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Regular life insurance can also be earmarked for the burial process. Although you typically aren’t able to dictate how your beneficiary uses the funds received at the time of your death, you can make your wishes known at the time of purchasing the life insurance. Most loved ones are more than happy to use their insurance windfall for burial, as it is an expected expense in the first place.

Funeral pre plans allow you to decide on services and even pay for them before death occurs. Whether you choose to pay upfront or take advantage of a funeral payment plan, you can lock in today’s prices and cover all the expenses of a funeral months or even years in advance. Like insurance policies offered through a funeral home, any purchases you make are likely to be tied to that particular home, so you will need to choose a location and company you trust.

• One of the more popular options today is setting up a funeral expense trust. Like pre- paying for a funeral, you supply all the funds for the burial process today. However, instead of buying certain products, you simply place your money in a trust that is sealed until the time of your death, and it remains free of taxes and other financial considerations. Most of these types of trusts are paid out within 48 hours after death, making it easy to access for the necessary funeral costs. This also allows your family to “bargain shop” or make decisions regarding burial or cremation that are important to them and their grieving process.

No matter what you choose, all of these options are a great way to plan for a funeral without asking your family to go through any more hardship than they already need to. For more information, you can talk with a funeral planner, funeral home, or financial advisor who deals in trusts, wills, and long-term planning.

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