Should I Prepay My Funeral?

there are pros and cons of prepaying for a funeral

Written by Kim Wilhelm

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Last Updated 14 Apr 2024

When you plan your funeral ahead of time, you can save your family a lot of stress. But doing careful planning doesn’t mean you have to sign a prepaid plan.    

Are prepaid plans safe? Final Expense Direct shares the pros and cons of prepaying for a funeral.

About Prepaid Funerals   

It’s possible to pick the funeral home way before you need it, and you can pay for all or some of the home’s services well in advance. Funeral homes sell pre-need plans (also called pre-need insurance) that let you arrange the kind of services and casket you want. 

You can make a lump-sum payment now or choose to pay through installments. The funeral home will place your money in a trust fund with the payout caused by your death or purchase an insurance policy assigning itself as the beneficiary.      


Important Questions to Consider

Before you decide to prepay for your funeral, consider the following questions:

  1. If I change my mind, can I get a full or partial refund?
  2. Will my money earn interest? If so, how much? Who receives it?
  3. If there’s an insurance policy included, is there a waiting period before it applies? How long?
  4. Does my health impact the plan’s terms?
  5. Does the plan cover price increase, or will my family need to pay extra?
  6. What happens if the funeral home goes bankrupt? Will another funeral home take over my plan?
  7. If I move, can the policy be transferred to a funeral home in a different state?  
  8. If there’s leftover money after my funeral, does the home keep it, or will my beneficiaries get it?

If you elect to pay for your funeral beforehand, proceed with caution. Make sure you’re getting the services you clarify at the contracted rate.  

The Benefits of Prepaying for a Funeral

By prepaying, you can reassure your family that you’ve taken care of the big decisions. It can save them some hassle when the moment arrives. The advantages are more about reducing emotional strain than anything else. Just make sure you understand the contract when you buy this quasi funeral insurance.       

The Drawbacks of Prepaying

Aside from the questions listed above, some contracts require extra payments for final expense funding. The home’s charges may increase between when you sign up and when you sign off. If this occurs, someone will need to pay the remainder. 

Also, laws in several states don’t show much protection for your prepaid money. 

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Are There Safer Alternatives? 

Yes, and here’s what you can do:

  • Comparison shop — you can prearrange without prepaying. Get in-depth price lists from many funeral homes and compare prices. Some funeral homes let you complete a pre-arrangement form, and they’ll keep it on file for you. 
  • Establish an individual payable on death account — you can put money aside for your funeral costs without giving it to a funeral home. You can make the account payable upon death to a friend or family member who will use the money for your funeral.  
  • Buy an insurance policy — Your loved ones can use the benefits of final expense insurance to cover many expenses, including your funeral and burial arrangements.   

Call Final Expense Direct

Planning a funeral sounds rather dreary, but there is a way to have peace of mind. Final Expense Direct has over three decades of experience with providing the best life insurance for seniors. To learn more or to get a quote, call 1 (877) 674-0236.


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