How to Pay for a Funeral
Although rates of advance funeral planning are on the rise, the majority of people aren’t financially prepared to pay for a funeral. With a price tag of anywhere from a few thousand to up to $10,000, it’s not easy to come up with the money necessary to make the final arrangements—especially if you’re forced to wait weeks or even months for a life insurance policy to pay out.
If the deceased made arrangements (either in the form of funeral insurance, a pre-planned funeral, or other package), you have the benefit of being financially prepared to handle the funeral costs. If, however, the death was sudden or there wasn’t enough time to make financial arrangements, there are several ways in which you can pay for the funeral. Advance funeral planning of both details and funds is the best course of action.
Funeral Home Financing
Most funeral homes (especially the larger ones) offer a financing option for the newly bereaved. This might be a payment plan spread out over a few months, or it might be a funeral loan offered through a third-party lender (with interest rates in keeping with your personal finances and credit score). Rates of interest and the terms of your loan will vary, but this can be a low-hassle way to get the money you need right away. In many cases, they’ll even over a short-term loan if you have a life insurance policy that will pay out in the immediate future.
Executor to the Estate
If the deceased is leaving behind a fairly large estate, you might be able to pay for the funeral using the money and properties bequeathed on the family. Because most estates have to go through probate first, however (and because there might be multiple family members with a stake in the inheritance), it’s best for the executor to the estate or someone else with legal access to the deceased’s accounts to handle these affairs.
You may be eligible for a one-time payment of $255 upon the death of the deceased (if you are a surviving spouse or child), as well as later benefits if you meet the criteria. You must always notify the Social Security Department when death occurs, so be sure and use this time to determine if you can receive these benefits and use them toward funeral costs. Contact them at www.socialsecurity.gov 1-800-772-1213 for more information.
Department of Veterans Affairs
If the deceased was a member of the military in his or her lifetime, there may be some money available through the Department of Veterans Affairs. Veterans may be granted a burial allowance of up to $2,000 or even provided with burial and other services free of charge in a National Cemetery. Visit them on the web at http://www.cem.va.gov/ for more information.
Direct Burial or Cremation
If none of these situations apply to you, you can also opt for direct burial or direct cremation—both of which exist to help save money on funeral costs. In these options, the body is still treated with the utmost respect, but you can forgo the ceremonial rites and expensive caskets and headstones for a more straightforward interment. Find a good funeral home to work with so that you don’t sacrifice professional service just because you are using less costly options.