If you’re thinking about planning for your funeral in advance, you’re making a practical decision; by planning your funeral and paying for it in advance, you can save your family considerable funeral costs and reduce their decision-making during an emotionally charged time. Fortunately, there are numerous possibilities available when it comes to taking care of your funeral expenses in advance. In this article, we’ll deal with the two main options that are available to you: pre-need funeral plans and final expense insurance. Before we start, let’s consider how much an average funeral will cost.
How much does an average Funeral Cost?
Surprisingly, most people have no idea what a funeral can cost unless they’ve been involved with arranging one or helping to pay for one. Like other goods and services, the cost of funerals continues to go up year after year.
Parting.com, and end of life planning website provides great information regarding planning and paying for a funeral, and their information is continually updated. According to recent data they’ve gathered across the U.S., they have the following to report:
Today, the average North American traditional funeral costs between $7,000 and $10,000. This price range includes the services at the funeral home, burial in a cemetery, and the installation of a headstone. While cremation is gaining in popularity, the traditional funeral is still the most popular manner for disposing of the deceased.
Here is a reasonable “ballpark” estimate of the main funeral costs.
It’s important to notes that funeral prices vary considerably between funeral homes and geographic areas of the country,
- fee for the funeral director’s services: $1,500
- cost for a casket: $2,300
- embalming: $500
- cost for using the funeral home for the actual funeral service: $500
- cost of a grave site: $1,000
- cost to dig the grave: $600
- cost of a grave liner or outer burial container: $1,000
- cost of a headstone: $1,500
In this example, total costs would approximate $9,000….and that’s just for the “main” items. There could be additional charges for things like placing the obituary in the newspaper and buying flowers. Read the article…
Payment Options
Men and women pay for funeral expenses in a variety of ways. Some people will likely begin putting money in a savings account regularly or perhaps low-risk investment account set aside for just this objective. The downside to traditional saving is the incredible amount of self-discipline needed to continually save some money and to leave it alone once it’s there.
Other individuals who already purchased life insurance might choose to assign a specific amount of the death benefit toward the cost of their funeral. Then again, based upon on your age, your life insurance could be a term insurance policy that will expire after a specified period of time. If you do not have any type of permanent life insurance, you might easily find yourself unequipped if or when your existing policy expires.
Over time you may have stumbled upon the terms “pre-need” or “prepaid” funeral plans and final expense insurance. How they work, and what are the differences between them will be discussed going forward.
What is a Pre-Need Plan?
A pre-need plan is typically obtained from a funeral home that you prefer to do business with. To set it up, you determine the funeral home you want to work with and determine the type of arrangements you prefer. The funeral home will price out the total package for you and then you pay the total amount ahead of time, in a lump sum or over time, or assign a funeral policy to the funeral home.
If you decide to use the pre-need method of paying your funeral costs in advance, Parting.Com offers some very good advice:
Funeral expenses really consist of three separate pieces:
- the services and merchandise provided by the funeral home
- the costs and services to dispose of the body or cremains (i.e. ashes) at the cemetery or elsewhere
- the cost to purchase and install some type of memorial (i.e. headstone, marker, monument)
Even if you end up paying for all three pieces through the funeral home, it’s best to break the cost of a funeral down into the above-three categories.
When estimating your TOTAL funeral costs, you must add all three pieces together. I think this is by far the best way to plan a funeral because it allows you to isolate and prioritize the goods and services that are most important to you.
While every family is different, the most common complaint I hear from families is “I wish I would have spent less on the funeral and more on the memorial”. This makes some sense since the memorial is the only thing that lasts after the funeral is over. Read the Article…
What is Final Expense Insurance?
A final expense policy is bought from a life insurance company, and the beneficiary can be a family member, a friend, or anyone else of your choosing. These policies typically have a death benefit that varies from $5,000-$30,000, and the insurance proceeds can be used for just about anything, including funeral costs, helping family members with transportation and accommodations, or unpaid medical and nursing home expenses. The death benefit is typically paid very quickly after the claim and is not taxable to the beneficiary.
The great thing about using final expense insurance to pay for funeral expenses is that your policy, which is whole life, becomes an asset with cash value. This means that the policyholder can access the cash that accumulates over time by taking out policy loans that may or may not be repaid.
Final expense insurance is also guaranteed for life as long as the required premium is paid. The insurer cannot cancel your policy if you become seriously ill and they cannot increase your premium because of your age or medical conditions.
Although many insurance companies offer final expense insurance, they are not all the same. It’s important that you contact an insurance professional like Final Expense Shopper to get all the information you need regarding the features and benefits of your policy.