Final Expense University Chapter 8

Can’t I just pre-pay for my funeral?

You certainly can, and some people do. This approach has advantages and disadvantages.

When you pre-pay for your funeral, you get to personalize it to your taste. You can meet different funeral directors and visit various funeral homes until you find one you like. You can pick out the preferred casket and the favorite plot in the cemetery. Another advantage of pre-paying is that it will most likely prompt you to discuss your choices with loved ones, leaving them more confident that they know your wishes.

Before you pre-pay, check your state guidelines for how the money will be held until your death. Make sure you know what you’re paying for. Most importantly, are you locking in the rate for your funeral, or is there a chance your family would face an up-charge when the time comes?

If you do any pre-planning or pre-payment, it’s important to tell a loved one what you did and where you keep the documentation.

The disadvantage of pre-payment is that it’s less flexible than burial insurance. Will you or your family be able to get a refund if your funeral plans change? Will you lose the money you pre-paid if you move to a different area? What happens if the funeral parlor goes out of business?

With final expense insurance, your surviving loved ones will receive a payout they can spend anywhere. If you want to leave a clear indication of your wishes without necessarily locking in the funeral home, you could always combine burial insurance with a document stating your preferences. Kept wherever you keep your will and most important documents.