Things You Need to Know Before Buying a Prepaid Funeral Plan

Updated on September 17, 2020

Death is inevitable and uncertain. So, it might be wise to plan your funeral while you’re alive and healthy.

Although it’s not the most enjoyable thing to do and you may be confused about whether it’s right to do it at all or not, you don’t want to stick your family members with a funeral bill when you die. The last thing you want to do to them is to worry about your funeral expenses. 

While planning for your burial, you may consider prepaying all the costs so that when the time comes, you’re covered. Before you take such steps, you need to get some ideas about the prepaid funeral plans.

What are Prepaid Funeral Plans?

A prepaid funeral or burial plan is a set of funeral arrangements, where the money needed for the funeral has already been paid before the death. All the arrangements are covered by a funeral home as detailed as you desired.

A prepaid burial plan could cover the cost of the cremation, the headstone, obituary information, and even the medical bills in some cases. Click here if you want to learn more about this funeral plan or other similar insurance policies.

Types of Prepaid Burial Plan

Some people not only plan their funeral but also pre-pay for the arrangements. If you want to stick to your funeral plan, here are some prepaid options you can try.

Whole-Life Policy

Just like a regular life insurance policy, a whole life policy covers you for your life as long as the premiums are paid. After your death, the beneficiary will receive the money to pay for the funeral and other related arrangements.

For some states, the rule is the beneficiary will be the funeral director, while other states don’t require such rules.

Burial Insurance

This is another type of insurance, which covers all the relevant expenses when you pass away. You can choose the beneficiary who will be able to use the money the way they prefer to make the arrangements.  At the time of your passing, the named beneficiary receives a lump sum and tax free death benefit.  There are NO restrictions on how the proceeds can be used.  Several well known life insurance companies offer non medical exam policies to the senior community.  Some examples are Gerber Life, Lincoln Heritage, Colonial Penn, and Mutual of Omaha.

Revocable Trust

A revocable trust lets you pay for your funeral in installments. Your payment will be deposited into an interest-bearing account. Once you have passed on, the beneficiary (in this case the funeral director or the person you choose) will be able to use the money to pay for your burial.

Irrevocable Trust

When you set up an irrevocable trust, you need to prepay your funeral costs and make a plan, which pays directly to the funeral director. While it’s quite similar to the revocable trust, you can’t change the plan of the irrevocable trust.

Why You Should Pay for Your Funeral

Once you’re passed on, there will be so many costs that your loved ones will have to bear. Paying for the funeral before you pass away can be a great financial help for your family members.

Cost-Effective Policy

Unlike a whole or term life insurance, a funeral plan can be purchased for small amounts, meaning that it won’t be a pressure for you to pay the premium.

Besides, these types of insurance policies don’t get expired as long as you’re paying your premium. Also, it’s easy for your pocket since you don’t need to pay at once.

Funds for a Specific Reason

Most people assume the expenses of the funeral will be covered by the life insurance they bought. However, considering this situation can create some unforeseen costs, you should buy an insurance plan for your funeral.

Once you pass away, your family members need to pay your medical bills, taxes, etc., which you don’t want them to use from your life insurance.

In that case, you must have a different set of funds, which can cover all these expenses.

Personalized Funeral Plan

Having an insurance policy for your funeral allows you to decide what kind of service you want. You will be able to leave clear instructions for your beneficiary or the funeral home so that they can arrange your funeral or cremation exactly the way you want.

Faster Response

Some life insurance policies take a lot of time to process. This leaves your family members having to go through a big hassle for your funeral. However, if you go with the funeral plan, this will never happen.

Burial insurance plans make cash available quickly, meaning that your family will spend less time on arranging money and more time remembering you.

You Can Protect Your Family

Your loved ones may get emotional while mourning for your death. Things might go completely wrong without the proper plan. They may end up spending too much for your funeral while they are grieving your loss.

Having a burial plan will free your loved ones from making such mistakes. As the premium is already paid, they don’t have to worry about the costs at all.

Final Thoughts

While you’re planning to save your family from the additional cost regarding your funeral, make sure you do it in the right way. Buying insurance from a badly reputed company may cause unnecessary trouble for your family instead of helping them. So be careful and choose the right company that suits your needs.

Above all else, planning for your funeral is an important discussion to have with your family. While it’s not pleasant, it’s a necessity. 

Be sure to communicate your wishes and consider what your family members will have to do to fulfill them. You’ll be surprised how relieved you will feel once you’ve made your final decision.


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