Some funeral homes offer pre-paid funeral plans, which enable you to pay for the services and casket in advance. They can be paid in one lump sum or through instalments.
When considering buying a pre-paid funeral plan, there are a few important points to consider: costs, taxes, insurance and options.
Costs
Pre-paid Funeral Plans, sold by funeral homes, offer a way for you to budget for your final expenses. These plans enable you to make detailed wishes for your funeral or cremation service and then pay in instalments over time.
They can also protect you against inflation. You can arrange your plan with either the funeral home or a prepaid contract provider that works with multiple funeral homes.
Costs associated with a funeral pre-paid plan depend on what services you select, your age and where you reside.
Prepaid funeral plans offer some advantages, but there are more cost-effective alternatives that will still meet your goals. One option is allocating some of your existing life insurance policy proceeds towards funeral expenses. Another is opening a checking, savings or money market account that earns interest.
Taxes
Pre-paid Funeral Plans are an excellent way for loved ones to guarantee they won’t have to worry about financing their final expenses. Many of these plans offer price guarantees which shield customers against rising funeral goods and services costs.
These plans are tax deductible and, depending on your state, may qualify for Medicaid spend downs.
Prepaid funeral plans are agreements between you and a funeral home in which you prepay for the services you desire. You have the option of paying in full at once or making monthly instalments over three to 10 years, depending on your financial situation.
Insurance
Pre-paid Funeral Plans offer you the unique option to create and pay for your funeral arrangements before you pass away. These arrangements can be as elaborate or simple as desired, including a casket, burial or cremation plot, headstone, obituary notice, flowers and more.
Most funeral homes offer pre-paid plans. With these, you can select the services and casket of your choice and then pay it all at once or in instalments.
Many people opt for these plans because they provide protection from rising prices and make it simpler for surviving family members to organize their final wishes.
Some funeral homes provide plans through life insurance companies, providing an alternative for people who do not qualify for traditional life or final expense policies.
Choices
Pre-planning isn’t just about saving money; it also gives your loved ones a meaningful way to say goodbye. Whether you opt for a pre-paid funeral plan or not, there are numerous choices you can make to guarantee your wishes are carried out.
One option is to partner with a life insurance company or bank to hold your funds. The advantage here is that you can name a beneficiary and they will receive full payouts upon your death.
If you would like to leave a specific amount of money to your loved ones upon death, a Payable on Death (POD) account is an option. These accounts are set up through banks and can be accessed at any time.
Your choice of which prepaid funeral plan is most suitable for you depends on your individual needs and budget. Additionally, it’s essential that you are aware of all associated costs and fees that come with each option.