Is Pre-Paying A Funeral Right For Me?
The simple answer is, maybe. There are times when pre-paying a funeral is a requirement for those who are on or applying for Public Aid assistance. In such instances as well as in any other, the consumer must be aware of what the pre-paid plan covers and what it doesn’t. Most states require that funds used to prepay a funeral either be placed in a special trust or used to purchase a life insurance policy. Either one can be a safe and secure means of providing for a future funeral. As with any contract, the “devil is in the details.” Before signing any contract you must be certain that all selections for services, merchandise, and all details of the arrangements are written out and have a monetary amount assigned to each. Funeral homes will usually guarantee their services and merchandise so this must be spelled out in the contract. Some items, known as “cash advance” items are usually not guaranteed as these costs are beyond the control of the funeral provider. It is better for the purchaser if they can pre-pay the cemetery costs, such as the interment charges, directly with the cemetery if they will guarantee, in writing, that there will be no additional costs at the time of need, unless the family arranges for an interment that would normally require additional costs, like overtime or holiday charges. These pre-paid accounts should earn interest and this interest is what funeral homes use to offset the increase in prices at the time of need. Sometimes there is an overage in the account and your contract should specify that any overage in the account is returned to the family if they elect not to use it for additional services or merchandise that they choose to add at the time of need. Also if great importance is the “portability” of the benefits. What happens if the insured moves and wants the services and merchandise provided at a place other than where they were originally purchased? Insurance policies are usually completely portable. Before signing any contract for a pre-paid funeral, read all the “fine print” as well as the regular size print. Talk to a family member or a trusted friend and ask them if this is something they would sign if they were in your circumstances. Don’t feel pressured to sign anything! Since time isn’t usually a factor when thinking of pre-paying for a funeral, do your homework. Compare the costs of the services and merchandise you’re thinking about with other funeral providers. (See the posts “Apples And Oranges” on how to do just that.) If a pre-paid funeral plan is written properly and includes all of your choices, then it just might be the right thing. It certainly can be an important part of your asset management and estate planning. If after your due diligence is done and you decide to go ahead with pre-paying, then all you have to do is enjoy the rest of your life without worrying about your funeral. For more information about pre-planning, go to my website: www.chesedvemet.com