Burial Insurance Topics
How To Finance A Funeral Expense
Whether you’re planning for one or paying for one, many aspects of a funeral can be arranged ahead of time. While it may seem morbid, it makes it easier to honor the deceased’s wishes, and it allows more time to find just the right location for the event. It also opens up new possibilities for financing, which can save you a great deal of anxiety about money during an already emotional time. Also, unless the deceased bought a prepayment plan, insurance or made other arrangements, the funeral usually has to be paid for on the spot, though some funeral homes and financing companies do offer funeral financing.
Funerals don’t have to be so pricey. There are a number of potential costsinvolved in a funeral and to a great extent, the more options you choose, the more expensive the funeral will be. Even your individual preference of burial or cremation for the remains will influence your costs. Fortunately, there are also a number of financing options in advance of a death. Afterward, however, there are slim to none. A term or whole-life insurance policy is one popular financing option that can be purchased years ahead of the actual event. A $10,000 level term insurance policy on a healthy male runs from $12 to $20 a month or $28 to $40 for whole life. For a healthy woman, term insurance would be $12 to $15 a month, while whole life would cost $25 to $35. Unfortunately, many insurance companies won’t sell policies this small, and others won’t sell long-term term policies to older people, offering them only time-limited policies. To get the right price, you may have to shop around.
Other options for paying for a funeral in advance include:
A prepaid funeral plan, known as an irrevocable funeral trust, which you generally buy from a particular funeral home.
A Totten trust, which is payable to a beneficiary without going through probate.
A joint bank account, in which you deposit a sum of money in a bank, savings and loan or credit union with one of your beneficiaries with the intention that he or she will use the money to pay for your funeral.
Upon bereavement, financing options are limited to using your credit card or getting a signature loan through a funeral home or financing company. For a rundown on the pros and cons of each option, see the table below. By federal law, funeral homes must provide you with their general price list at the beginning of any discussion of funeral planning. Using that as a starting point, you can pick apart the list and only purchase the pieces that you want in order to be more frugal. Still, when you are planning a funeral directly after bereavement, it’s difficult to even think about prices or comparison shopping because you will be under a large amount of stress. If you have the luxury of planning in advance, you can visit several funeral homes and let them know you are shopping around. Generally, any option that doesn’t include the remains of the deceased will be cheaper than those that include them, because you’ll have to use the pricey services of a funeral home.
By having direct cremation and no service at the funeral home, you can save thousands of dollars and can have a memorial service elsewhere. If you want a more traditional funeral, you can buy a casket from somewhere other than the funeral home; many funeral services’ Web sites and other vendors offer overnight delivery, directly to a funeral home, of a variety of caskets at one-third to one-half the cost you’ll pay at the funeral home. Donating the body to a medical school, mortuary school or anatomical firm can also save you money. In exchange, most will cremate the remains of the body after use and return the ashes to you. Most schools and firms require that you register before you die; contact medical or mortuary schools in your area for more information