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January 16, 2018
Funeral Planning Options: Should You Prepay For a Funeral?

Funeral Planning Options: Should You Prepay For a Funeral?

Funeral planning can be somewhat of a drag, but life is expensive – even after you die.

Making sure you have enough money set aside for your end-of-life costs is extremely important, and here’s why.

Often times, your children will try to divvy up the costs, but if there is no money, your loved ones might take on credit card debt.

Even worse, they may not be able to put together a proper funeral to cherish their last memory of you.

Finally, the last resort would be to leave your body unclaimed. If your family can’t afford any funeral costs, you can choose to not claim the body, leaving the local or state government to pick up the cost of a cremation.

And don’t rely on Social Security – their burial benefit is only $255, which is a drop in the bucket compared to the cost of a real funeral.

So, what next? We’ll answer the following questions:

  • How much does a funeral cost?
  • Should I prepay for a funeral?
  • Should I get final expense insurance?
  • How can I save money on my funeral?
  • How do I plan the funeral service in advance?

If you’re ready to tackle your funeral planning so that it’s ready to go, we’ll work through it together. Crossing this big item off your to-do list will feel amazing!

How much does a funeral cost?

The average cost of a funeral with only standard selections is about $8,755 (National Funeral Directors Association, 2014), and your health care costs at the end of your life are the highest they’ll ever be.

Screenshot 2017-03-10 12.03.57

Besides your funeral and health care costs, there are a lot of other unexpected bills to consider:

  • Outstanding debt
  • Ongoing household expenses
  • Legal expenses
  • Travel and lodging for out-of-state family (for your funeral)

There are also some costs associated with your funeral that you might have never thought of, such as:

  • Flowers (costs vary, but a flower arrangement for the top of your casket can cost upwards of $700)
  • Catering/food for after the funeral (costs vary depending on the number of guests)
  • Obituaries ($200-$500)

It can feel like a lot. Paying for emergencies in everyday life is stressful, and now you have to plan for bills after you’ve passed away?

But here’s the good news: there are ways to pay for your funeral if you’re smart enough to plan ahead.

And you’re reading this, so we think you’re pretty smart.

The majority of people without a full life insurance policy do one of two things:

  1. Prepay for funeral arrangements
  2. Pay towards final expense insurance

Should I prepay for a funeral?

Prepaying for a funeral means that you pay the funeral home in advance.

This allows you to reserve a space for burial and take away cost uncertainties that exist if you wait.

Funeral expenses do go up over time. In fact, the costs have doubled over the last 20 years.

Pre-paying for your services locks you in so that you aren’t subject to unexpected rising costs. In essence, you’re paying for tomorrow’s funeral costs at today’s price.

But prepaying comes with its issues:

  • If you lock yourself into a particular provider and location, logistic complications can get in the way. What if you move later in life?
  • The funeral parlor can go out of business. Getting a refund sounds easy, but it’s actually a nightmare, and making alternative arrangements becomes difficult and expensive. It’s also not unheard of — in fact, the number of funeral homes in the US has been steadily declining since 2004 (National Funeral Directors Association).
  • You might need that money before your funeral.

Here’s a snapshot look at the pros and cons for those of us who like to see a visual:

Pros of Prepaid Funerals Cons of Prepaid Funerals
Your price is locked in when you pay The business could go bankrupt leaving your investment in question
Your burial space is reserved You can’t change your mind if you want to be buried somewhere else
Your family doesn’t have to make any decisions Those funds are tied up

Long story short: Steer clear of prepaid funerals if: you might move, your family is scattered across the country, you might need that chunk of change, or have reason to believe the home may not be around for a long time.

Should I get final expense insurance?

Another option is final expense insurance. It’s also sometimes called a burial policy, a final expense plan, or burial insurance.

You pay a monthly premium to the insurance carrier, and when the time comes, the insurance carrier fulfills your funeral benefit to your beneficiary.

This options gives you more flexibility — you don’t have to worry about moving and wanting to be buried somewhere else, and you don’t have to worry about your funeral home of choice closing its doors.

This option still gives your family peace of mind that all expenses are covered.

Finally, final expense insurance doesn’t only cover funeral costs — it can help pick up final health care bills that your children will be responsible for.

The downside of final expense insurance lies with the potential uncertainty that long life can bring. If you significantly outlive your initial life expectancy, you can end up paying more than the benefits you’ll end up receiving.

Keep in mind that the funeral service and arrangements are still up to your family unless you put together a detailed funeral plan. (We’ll cover that later in this article.)

The only other downside to a final expense policy is that the payout can be used for anything, so be sure your beneficiary is trustworthy.

Pros of Final Expense InsuranceCons Final Expense InsuranceNo commitment to burial site; freedom to moveYou may pay more into the policy than what you’ll get backLow monthly premiums; no tied up cashFamily may still have to make decisions if you haven’t expressed your wishesFamily has no financial responsibilityThe beneficiary can technically use the payout for anything they want

Long story short: A final expense plan is perfect for you if: you want the freedom to move, you aren’t good at saving money and/or don’t want to tie up a huge sum of cash right now, you want your family to be free of financial burden.

Further Reading: Which Final Expense Insurance Policy Is the Best for Me?

How can I save money on my funeral?

There are ways to save money on your funeral if you can’t afford a more robust final expense policy.

To save money on your funeral, consider these options:

  1. Cremation is significantly cheaper than a traditional burial.
  2. Consider cheaper caskets, such as steel or cloth-covered caskets, which can save you a few thousand dollars.
  3. Bring in your own flowers rather than buying them through the funeral home.
  4. Consider donating your body to science. Most medical facilities handle transportation and burial costs.

Funerals can be done a budget, so be sure to tell your funeral director that you’re tight on cash. Trust us, they’ve worked with every type of family – from those looking for a lavish funeral to those with practically nothing.

How do I plan the funeral service in advance?

If you want your passing to be as stress-free as possible for your loved ones, consider planning your funeral arrangements ahead of time.

This includes answering questions like:

  • What type of service do you want to have? (Funeral, burial, cremation, memorial, in your home)
  • Do you want any other funeral events? (Wake, visitation, reception)
  • Where do you want your funeral to be held?
  • Who do you want to officiate?
  • Who do you want to be your pallbearers?
  • Who should deliver eulogies?
  • What scriptures or readings would you like to include?
  • What music would you like to be played?
  • Should any groups, organizations, or clubs be notified of your passing and be invited to your funeral?
  • Who should be invited to your funeral? Make a list.

If you can spell all of this out for your family, you will save them a lot of grief and unneeded anxiety. After all, this is your day, and they’ll be glad that they’re fulfilling your last wishes.

Luke Hockaday
Luke Hockaday
Luke Hockaday is a Customer Success Rep here at Senior Allies. Luke has been helping Medicare-eligible clients with their insurance and retirement-planning needs since 2011. Luke is passionate about 3 things, and 3 things only: senior insurance, football, and food!

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