Death is not a subject that people typically like to talk about, let alone think about. It’s one of those things that we all must face someday, though, which means planning a funeral. Not only can planning a funeral be difficult, especially with the emotional toll of losing a loved one, it can also be quite expensive. Many people are often surprised by just how much a funeral can cost. As you get older, you might start to worry about how your family will deal with having to plan your funeral and pay for it. You don’t want to leave your loved ones with that kind of burden. One way to alleviate the emotional and financial stress of planning a funeral is to prepay for it.
Pre-Planning and Pre-Paying Your Funeral
So, what exactly is a prepaid funeral? The entire premise behind prepaid funerals is to plan, and pay for, your funeral before your death. Funerals are expensive. The average funeral in the United States costs around $7,000, while some funerals can easily cost more than $10,000. That’s a lot. When you set up your prepaid funeral, you make all of your arrangements, so your family doesn’t have to make those decisions. You can pay for it all up front, in installments, or set the money aside.
Setting Up a Prepaid Funeral
After making all of your funeral arrangements, there are a few ways that you can go about setting it up. One way is to set up a joint bank account with a trusted loved one and designate the account as the one used to pay for your funeral. Whether you choose to pay in installments and pass before the entire cost is paid off, or you use the account to save up for the whole cost, your loved one will be able to access the account and make the necessary payments. If you chose to use a savings account, it’s essential that you set up a joint account. Otherwise, your loved ones won’t have access to the account until your estate has settled, a process that could take months.
You can set up a payable on death, or POD, account. You name a beneficiary to this account, who gets access to the money upon your death. While you are alive, you can add funds, withdraw funds, or make any changes as necessary. Make sure that the beneficiary you name knows that the money is meant to be used to pay for your funeral.
You can set up a trust in which your funeral home is named as the trustee. After signing a contract, you pay the funeral home in installments. Your payments are put into an interest-bearing account that the funeral home can use to pay for your funeral.
Another option for a prepaid funeral is to take out a burial, or final expense, insurance policy. You can set the amount for your policy and then make monthly payments toward it. Your monthly payment will vary based on different factors, such as your age and sex. After your death, the policy can then be used to pay for the cost of your funeral.
What are the Benefits of Prepaying for Your Funeral?
One of the most significant benefits to setting up a prepaid funeral is that you do not straddle your family with a substantial financial burden while dealing with the emotional toll of your loss. If you plan as well, your family also will not need to worry about that aspect either. They can focus on processing their grief and honoring your memory. You also do not have to worry about putting your family in financial trouble as they try to scrape together money to pay for your funeral while they’re still trying to take care of their own families and financial obligations. However, you set up your prepaid funeral, make sure that you share your plans with your loved ones.
Your family will have to go through enough upon your death. While it might not be pleasant to think or talk about, a prepaid funeral can be a great way to help your family avoid the added stress of having to plan, and pay for, your funeral. This way, they can honor your memory correctly without having to worry about the financial impact the funeral will have on their futures.