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Funeral Services and Preplanning
When we’re younger, we’re inclined to believe we’re immortal. Our carefree approach to life changes as we get older, however. There comes a time when it’s important to start thinking about where you want your final resting place to be and how you want to be remembered by your loved ones after you pass. Making advance arrangements for your memorial services and disposition greatly reduces the stress for your surviving loved ones and prevents potential disagreements at a time when their emotions are already running high. In some cases, more affordable funeral services are available by preplanning.
What is Preplanning?
Funeral preplanning, also known as pre-arrangement or preneed plans, means making funeral arrangements before you die. Preplanning could include basic details of final body disposition (burial or cremation) or more complex instructions such as who you want to deliver your eulogy and what songs to sing at the memorial service.
A common misconception is that in order to preplan, you must prepay. There are actually no costs involved when creating a funeral preplan. Many people still choose prepaid funeral plans, however, as it may save money and/or help them qualify for Medicaid. Individuals pay an agreed-upon amount and sign a contract with a funeral home in exchange for a specific package of goods and services at the time of death. Paying costs upfront also enables you to visit different funeral homes and burial sites. You have time to compare funeral packages and find the right services for the right price. This is especially important considering the 2019 national average for a funeral with a viewing and burial was $7,640 according to the National Funeral Directors Association. When you factor in additional costs such as an obituary, flowers and a monument or marker, the total often climbs to $10,000.
Direct cremation is the most cost-effective option because the body is cremated without holding a funeral first, but many people prefer to have an open-casket viewing and memorial service before cremation. The 2019 national average for cremation costs including the funeral and viewing was $5,150, which leaves many people wondering how to pay for everything. It’s important to read contracts carefully and consider different payment options before purchasing a prepaid funeral plan or taking out an insurance policy.
A burial fund is a designated financial account set up specifically for any costs associated with funeral arrangements. This functions similarly to a savings account and is payable upon death to a designated beneficiary. Be sure the person you choose can be trusted to carry out your wishes using the money.
Also known as burial insurance, preneed insurance or final expense insurance, this type of policy is similar to life insurance and is paid through an insurance provider. The Funeral Consumers Alliance warns that people often pay as much or more for funeral insurance policies as the policy actually pays out, however.
Funeral trusts allow you to set aside a certain amount of money to be paid to a beneficiary upon death, which, in this case, is a funeral service provider. Trusts may be irrevocable or revocable. An irrevocable trust cannot be dissolved without the permission of the funeral home, and may not be transferable if you move to a different state before you die. A revocable trust can be cancelled or cashed out at any time.
Preneed Funeral Contracts
Preneed contracts are binding agreements between an individual and a funeral service provider. Through these contracts, the total cost of funeral plans can be paid in smaller amounts over a longer period of time.
This is a type of personal loan that is taken out to pay for funeral-related expenses. It requires a contract for repayment and has a high interest rate — often higher than a credit card. Before going into debt to pay for a funeral, take a close look at your budget and see if there are ways to eliminate expenses. Choosing whole-body donation as a disposition option, for instance, can save a lot on cremation or burial costs. It’s also a good idea to see what types of government assistance you might qualify for.
A small portion of the cost of funerals or burials can be covered by federally funded programs such as Social Security or Veterans Administration. Financial aid may also be available on the state or county level, but varies widely. Contact your local health department for more information.
Find Peace of Mind in Preplanning
It’s never too early to make advance arrangements for your funeral and formally communicate your wishes to your friends and family. It gives you and your loved ones comfort and confidence knowing everything is already taken care of. Download and use this free funeral preplanning checklist to get started today.
You can also search our free comprehensive directory of funeral service and preplanning providers below. If you have additional questions, contact one of our Care Advisors by calling 1-833-MY-SENIOR.