Search thousands of topics on CostHelper.com

BROWSE ALL TOPICS >> appliances babies & children  cars  consumer electronics health & personal care home & garden personal finance  pets  schools small business weddings
CostHelper > Personal Finance  > Funerals > Prepaid Funerals

Prepaid Funerals Cost


How Much Do Prepaid Funerals Cost?

 
low costFinal Expenses Insurance: $15-$30 a Monthaverage costFuneral Trust: $10,000-$12,000high costPre-Need or Burial Insurance: $10,000-$25,000
post E-mail post Post  

A funeral trust or funeral insurance can provide peace of mind based on the idea that surviving family members won't be overwhelmed by a huge bill for funeral and burial costs. The customer pays in advance for the services, and that money is distributed to the funeral provider after they die. The Legal Assistance Resource Center of Connecticut offers a pamphlet about prepaid funeral contracts[1] .

Typical costs:

  • With a funeral trust, an account is opened in the customer's name. The account can be funded with a single initial payment (for the full amount of the prepaid funeral contract, typically $10,000 or $12,000, or a plan can be established to pay into the account over a longer period of time. There can be administrative charges of $100-$200 or more to set up a funeral trust, and some trusts have annual maintenance fees of $50-$150.
  • Also called pre-need or burial insurance, funeral insurance is a form of term life insurance. The average coverage is $10,000-$15,000 and most companies won't cover more than $25,000 in funeral costs. It is usually purchased from a funeral home or mortuary. Funeral insurance premiums are generally paid as an initial lump sum (for the total amount being pre-paid) or with a three-, five- or 10-year payment plan.
  • Final expenses insurance is a form of term life insurance purchased directly from an insurance agent. The beneficiary uses the insurance money to pay any funeral expenses, but there is no prepaid plan with a specific funeral home, and no specific services or products are guaranteed to be provided. These policies have monthly premiums and an expiration date. If the insured person lives past a certain age (95 to 100) the policy expires and no money will be paid out. Monthly premiums vary based on circumstances and the amount involved. According to an agent who sells these policies, a 70- to 75-year-old non-smoking woman in good health might expect to pay a set rate of $15-$30 a month for a $10,000 policy
Related articles: Will, Trust, Estate Planning, Funeral

What should be included:
  • Typically a prepaid funeral contract is set up with a specific funeral home, mortuary or other provider, which places the money in a funeral trust or buys a funeral insurance policy. A prepaid funeral contract is not considered a financial asset in terms of qualifying for Medicaid health insurance. The prepaid fund remains intact even if the individual's other accounts must be liquidated to qualify for Medicaid coverage, although there can be a maximum amount allowed. For Medicaid planning purposes, generally a prepaid funeral plan must be irrevocable, meaning the money cannot be withdrawn until after death.
  • A prepaid funeral contract can be guaranteed, meaning the services and merchandise listed will be provided at the time of death without additional costs for those items (although there may be substitutions). Under a non-guaranteed contract, the funds are set aside to cover funeral costs, but with no specific products or services selected in advance. Prepaid funeral plans are not covered by federal law, and state regulations vary significantly. There can be problems if the funeral home or mortuary goes bankrupt or changes ownership; if surviving family members are unaware of the prepayment plan/method and make their own arrangements; or if the person buying the plan moves out of the area. FuneralPlanning101.com provides an overview[2] .
  • The company or organization managing a funeral trust can invest the money. A major trust set up by funeral directors in Illinois[3] lost millions of dollars.
  • With funeral insurance, usually a specific funeral services provider is named as the beneficiary, and the policy also specifies who receives any excess money above the actual funeral costs (and who is responsible for paying the difference if expenses are more than the policy amount). Insurance.com provides a brief overview[4] .
  • Some prepaid plans allow for transfer to another funeral home or mortuary (especially if the customer moves out of the area), or allow for at least a partial refund, but other plans are nontransferable and nonrefundable, meaning customers cannot change their minds or switch to a different funeral home.
Additional costs:
  • Surviving family members may face additional fees. For example, most prepaid plans include embalming, but if the body was damaged or an autopsy was required, there may be additional charges of $100-$500 for cosmetic restoration
  • If the customer dies outside the service area, there will be extra fees for transporting the body. In addition to actual shipping costs, funeral homes or mortuaries typically charge $900-$2,200 to prepare and forward a casketed body to another facility, and the receiving funeral home may charge $850-$2,200 for receiving a forwarded body.
Shopping for prepaid funerals:
  • Insure.com provides tips for buying funeral insurance[5] .
  • There should be a written prepaid funeral contract in plain language, explaining what is included; what services or items are guaranteed; who pays taxes on any interest generated; and what happens if a specified item isn't available at the time of death. The National Funeral Directors Association provides a list of consumer rights[6] for funeral preplanning.
  • Search for local funeral homes or mortuaries with the National Funeral Directors Association or the Selected Independent Funeral Homes[7] , or at TheFuneralSite.com. Or contact an insurance agent directly for information about final expenses insurance.
  • Forethought Life Insurance Co. is one of the largest providers of preneed insurance. It offers both funeral insurance[8] and funeral trusts[9] .
post E-mail post Post  
CostHelper News


3 Ways to Have the Government Pay You Back for Your Energy Efficient Upgrades
Any renovations or upgrades made to your home this year that included energy-efficient appliances could be eligible for some federal energy tax credits. But it's not just appliances. || Posted December 9 2013


7 Lesser-Known Discounts for the 50+ Crowd
As they age, members of the Baby Boomer generation don't like to admit that they're senior citizens, but they love getting discounts. It's kind of a quandary, because some of the best deals available are reduced prices for older folks. || Posted October 21 2013

‣ All CostHelper Blog Posts


What People Are Paying - Recent Comments


 

Comment On Your Experience With Prepaid Funerals
 
Subject:  *
Amount Spent:  *
Funeral Trust or Funeral Insurance: Services Included: 
Company Used:   
Comments: 
Purchased:  Year: 
City:  * State:  *
 
Information about you:
Email:  * Email addresses are not displayed.
Name:  This is the name we'll display with your post.
me on this computer
*=required field.
 



External Resources:
  1.  ctlawhelp.org/prepaid-funeral-contracts-burial-plots
  2.  www.funeralplanning101.com/pre-planning-funeral/funeral-pre-paying.aspx
  3.  illinoisissuesblog.blogspot.com/2009/07/people-look-for-answers-in-funeral.html
  4.  www.insurance.com/life-insurance/faq/funeral-insurance.aspx
  5.  www.insure.com/articles/lifeinsurance/funeral-insurance.html
  6.  nfda.org/index.php/planning-a-funeral/preplanning/30
  7.  www.selectedfuneralhomes.org/
  8.  www.forethought.com/legacy.html
  9.  www.forethought.com/legacy.html
More Personal Finance Topics
Check Out All Costs for Personal Finance How Much Do Tax Returns Cost? How Much Does Closing a Home Cost? How Much Does a Traffic Ticket Attorney Cost?

Search Thousands of Topics on CostHelper.com



Today's Featured Cost Articles

About CostHelper
CostHelper is based in Silicon Valley and provides consumers with unbiased price information about thousands of goods and services. Our writers are experienced journalists who adhere to our strict editorial ethics policy.

CostHelper Community
Deep cleaning and extractions
Paid: 90.00
When we got our 4-year baby from someone she had horrible breath and our vet recommended a deep cleaning for $175. I checked around and the SOHFGA did the same procedure for $80. So I had them do it at the same time we had her spayed... [more]
-Cocoa's Mom - Phyllis Rios
Dog Teeth Cleaning Cost
DIY (basic tools)
Paid: 0.00
The person that wrote this story.. don't have any idea what the true costs of auto repairs are. And like so many others that will talk about auto repairs, football, religion.... because they saw it somewhere... [more]
-smar
Brakes Cost
Bridge/Crown
Paid: 3200.00
Been going to this same dentist for 15yrs. Had two previous bridges and crowns and only paid 900.00 per procedure just about five years ago!! SERIOUSLY…$3200.00!!! I showed up with $1000... [more]
-Suz
Dental Crown Cost
Engine replacement of 1995Honda Prelude Si
Paid: 2000.00
My question is if you get a engine replaced why would they want to charge you again to replace the timing chain?... [more]
-Carter
Replacing a Timing Chain Cost
Cervical Laser Surgery for Abnormal Cell Changes
Paid: 45.97
Without insurance the procedure would have cost about $1,000. My insurance isn't great, but it still came to only $45. The procedure was performed without anesthesia... [more]
-ephthat
Cervical Cancer Treatment Cost
A 9-miles ride in ambulance with no medical attention cost 1200 in WA
Paid: 1200.00
This is legal rip-off. In my case, just a 9 miles ride from 1 hospital to the other without any medical attention cost me 1200 out of pocket. How can states attorneys and legislators let this happen everywhere... [more]
-TomN
Ambulance Cost