This article will cover the five best ways to plan ahead for funeral expenses. In brief, these are:
- Plan and pay ahead yourself
- Prepay at a funeral home
- Funeral/burial insurance
- Green burial
- Start a funeral fund
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The 5 Best Ways to Plan Ahead for Funeral Expenses
Death – the least favorite topic of many people. Despite the image of the smiling woman above, the reality is that many fear the thought of death and try to avoid the subject. But the human condition assures us that we will all go there eventually. While it is smart to invest in life insurance, it is also important that you have a funeral plan as well.
If you don’t want to burden your loved ones with the expenses for your funeral when your time comes, read on to know more on how to rest in peace knowing that you won’t leave them with a huge financial funeral problem. Here are the five best ways to plan ahead for your funeral expenses.
1. Plan & Pay for Your Funeral in Advance
Relieve your family from the hassle by planning your own funeral yourself. This may sound morbid when you are still alive and kicking, but you will not regret this decision when your time comes. Planning ahead can save you a lot of money and at the same time you can have the perfect funeral that you wish to have.
Planning ahead enables you to select the items you need and want. Fancy a pink casket? By all means, arrange it so that you can lie beautifully on the coffin that you carefully picked. Want to be cremated and planted as a tree? You can save now by ordering in advance. You can also have the luxury of time to canvass funeral establishments and choose the one that you can get the best value.
Carefully planning your funeral will save your family from the hassle of making decisions under painful and strong emotions and pressure of time. Make sure to write your funeral plan and give copies to a family member or your lawyer.
Some tips that will help you save when planning your own funeral in advance:
- Checklist: Pre-Planning Your Funeral or Memorial Service
- 15 Ideas for a Beautiful Memorial Service on a Budget
- Burial or Cremation: Which is best for you?
- What is Direct Cremation? – the simplest, most affordable option for final disposition.
- Should I Buy A Cremation Urn In Advance?
- Funeral Planning Checklist (Printable + what you need to know)
- Direct Burial: The Least Expensive Way to Be Buried
2. Go the Prepaid Route
According to a 2007 AARP survey, about 23 percent of people that are over 50 years old have prepaid at least a portion of burial or funeral expenses either for themselves or for someone else.
Why is it a good idea to have prepaid funeral plans? The cost of burial has dramatically increased over the past decades because of land shortages. Once you have pre-paid, you are protected against increases in funeral prices in the future. Check out the funeral agencies in your area and compare the price and the services that they feature.
On the other hand, most funeral companies do not offer refund if you change your mind and wish to cancel your plan. Your family may cover additional charges brought about by inflation. You may also have trouble transferring the policy if you decide to move out of the area. If the funeral home has ran out of business, your plan may no longer be valid.
Tips when considering a prepaid funeral plan:
- Shop around and compare prices & services. Two funeral homes in the same area may offer very comparable plans at very different prices.
- Read the fine print. Ask for a copy of the contract and take it home to read, or pass it on to your lawyer.
- Ask about what happens if you move or happen to die outside of the funeral home’s service area. This is where a large funeral home chain may offer some advantages.
- Learn exactly what is going to happen with your money when you prepay. Typically, the funeral home will put your money in a life insurance policy or a trust fund.
- Find out about refund and cancellation policies.
3. Cash in on Insurance
Buying funeral insurance and selecting which policy to buy is a hard decision. Before buying funeral insurance, have an estimation of your final expenses first. You would need to figure out the cost of your end-of- life expenses. Aside from the cost of your funeral which is often the largest single cost, you should also consider your other final expenses – such as medical bills, living expenses, legal cost, credit card bills, etc.
There are different types of insurance that are marketed today – burial insurance, funeral insurance or final expense insurance. Though these policies offer different features, one thing that they have in common is that the coverage typically range from $25,000 to $40,000.
Life insurance, on the other hand, has coverage of $50,000 or more and is intended to provide supplemental income to your family. Most commonly, the beneficiary of the deceased that has life insurance can use the money to pay for his funeral expenses.
More resources on insurance:
- Everything You Need to Know About Burial Insurance
- Find the Best Burial Insurance – Easy comparison of popular plans
4. Go Green
What is a green burial? Also called a natural burial, a green burial is a way of caring for the dead with minimal impact to the environment that helps in the preservation of natural resources, protection of health workers, reduction of carbon emission and the preservation of the natural habitat. When you choose a green burial, you use biodegradable and non-toxic materials like caskets, urns and shrouds.
If you want to save heaps on money for your funeral expenses, you go green. An example of green burial is burying the deceased directly, veering away from the use of embalming chemicals, concrete burial vault or cremation. Reduce your burial costs drastically by opting for biodegradable casket and clothing.
In going green, not only you will be able to save money on your funeral expenses, you can also leave with peace of mind knowing that your final departing did not bring harm to the environment.
Further information and resources:
- Planning Guide from the Green Burial Council
- The Green Burial Guidebook (book; an excellent resource)
- Grave Matters: A Journey Through the Modern Funeral Industry to a Natural Way of Burial (book)
- Greening Death: Reclaiming Burial Practices and Restoring Our Tie to the Earth (book)
- Dying Green (documentary)
- Eco-Friendly Cremation Urns
- Natural Burial Shrouds & Caskets
5. Start Your Funeral Fund
If purchasing a funeral plan may be a little difficult for your pocket, another option to get yourself ready when your time comes is creating a funeral fund. Simply put, it’s money that you save over the course of time for the sole purpose of covering your funeral expenses.
You can open a savings account to any bank, but it is recommended that you prefer a Totten trust because of the interest that it accumulates. It’s just a regular bank account, but there is a designated “pay on death” inheritor. You name a relative or friend as your beneficiary when you open the account. Put in your money in your funeral fund and collect the interest.
- How To Start A Funeral Fund in 5 Easy Steps
- What Is a Totten Trust?
- A Simple Guide to Start Saving Money – Take these tips and apply it to a funeral fund.
- How to Manage Your Money When You Don’t Have Any (book)
Whatever way you chose to plan your funeral expenses ahead, be sure to let your family members be aware of this plan. Be transparent with them and discuss your wishes and preferences. It would be better if you have a will which documents how you want your funeral to be arranged and how it will be paid for.
Since death is a hard fact to take in, a lot of funeral arrangements go wrong as decisions were made hastily at the last minute. When your time comes, you can close your eyes and have eternal peace knowing that you will not leave any debts to your family brought about by your funeral.
Please add your thoughts, comments, and personal experiences below! We love to hear from you. What works well for you, and what does not?