Is It Really Wise To Invest In A Prepaid Funeral?

funeral planning

The cost of a funeral in the U.S. arguably has become as high as the cost of living, if not more expensive. A standard funeral may cost between $6,000 and $10,000, so it makes sense why some people choose to have a prepaid plan.

If you live in Utah, the cost of miscellaneous expenses and other funeral arrangements will depend on where you live. Some funeral service providers may offer better rates for products and services in suburban areas, where prices are generally cheaper. For instance, the price of caskets or headstones in Ogden may be cheaper than in Salt Lake City. The same situation could be possible in other states.

Mixed Insights On Prepaid Funerals

Financial experts have different views on prepaid plans. Some say that it is unnecessary if your life insurance covers it, while others advised buyers to be very careful with their choice of funeral home. A company going out of business is likely to happen, which could make it difficult for you to get a refund.

It also should be clear on the coverage of different scenarios such as when you are traveling to a different country. If you still want to prepay for expenses, make sure that the contract addresses these concerns. Otherwise, your life insurance policy must cover burial and other final expenses arising from death.

Alternative Ways For Planning

An alternative to prepaid funeral plans include a savings account with an instruction that allows your family members to withdraw money upon your death. You only need to provide explicit permission to your bank to draw out the funds and make your spouse or children as the beneficiaries. It earns interest over time, but there are certain drawbacks.

Some of these disadvantages include the rate of inflation for products and services. If you only managed to save $5,000 over the years, your family will be forced to fill the gap in case your funeral goes over budget. A revocable trust serves as another option, which lets you pay for your funeral through installments. The funeral director is commonly listed as the trustee, who then uses the money upon your death.

Saving For A Funeral in a pink Piggy bank

Itemizing Funeral Costs

You could save money by only choosing to have as few services as possible. These may include not having a funeral director service and a ceremony. You could also buy a simple casket without a grave liner or outer burial container.

Some expenses may be necessary such as embalming and a headstone. Those who have been considering cremation should know that prices may cost up to $3,000 and more, which means that it can be as expensive as a burial.

Conclusion

It can be unnerving to plan your own funeral especially when life currently going well for you. Whether or not you decide to buy a prepaid funeral package, you should already consider having a plan in mind. This prevents your surviving family members from worrying about expenses when you pass away, and that can be harder for them during a time of mourning.

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