Prepaid Funeral Plan
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Prepaid Funeral Plan – Pros and Cons. Is There are Safer Options?

Funeral planning can be a tedious process and expensive too. The funeral costs vary depending on the arrangements, but they’re usually costly. However, you can cut costs on funeral expenses by resorting to prepaid funeral plans. It will also help you manage costs and lessen the burden on your loved ones.

If you looked up about prepaid funeral plan, you’d see divided opinions about it. While some favor it, some people are against the idea of advanced funeral planning. We'll look into the different aspects of prepaid funeral plans and see their pros and cons through this article. So, without further, let's delve into the article to know more about it. 

Understanding the concept of Prepaid Funeral Plan

Before we try to decipher the pros and cons of Prepaid funeral plans, it would be better to understand the concept of a prepaid funeral. The whole idea of a prepaid funeral plan is to arrange own funeral in advance. 

The plan covers all aspects from a funeral place and the options to be cremated or buried. Once you opt for a prepaid funeral plan, the funeral home will carry the process according to your will after your death. Also, you've already paid in advance, and your family doesn't have to worry about bills and funeral arrangements as well.

There are different ways to make a funeral plan in advance. In addition, it would also be best to consider the process and the cost before proceeding with any prepaid funeral plans. The concept of preplan funerals is to cut funeral expenses and give less burden to your family and loved ones. 

Funeral planning may seem a bit weird, but if you look at the long run, it will help you to cut expenses significantly. As mentioned earlier in the article, funerals are expensive, and in some cases it can be best to opt for prepaid funeral plans.

What comes under the prepaid funeral plans?

Now that you’re aware of prepaid funeral plans, you should also know what comes in the list. You can opt for the funeral products like caskets or services you prefer and pay it on an installment basis. Additionally, you can opt for plans that suit your budget. Some of the funeral products or services that you can choose are:

  • You can opt for cremation or burial, and it's your call to choose one that you prefer.
  • There is also an option for you to choose events. You can opt for the celebration of life or traditional service.
  • You can also opt for an urn or a casket. There are different types of caskets available in the market, and you can choose one that you like from well known US based companies like Trusted Caskets. 
  • The plan also covers the liberty to choose location, flowers, décor, music catering, and more.

How does a prepaid funeral work?

The working process of a prepaid funeral plan is simple. You can choose a funeral home to make plans of your choice. Additionally, a funeral home director or manager will assist you with the details. The process is simple, and you get to choose the product or service you prefer.

You can discuss with the funeral home director the location of the funeral. In addition, you also get to decide whether you want to do burial or cremation. With the prepaid funeral, you have the liberty to choose a different product or service. For instance, you can opt for a casket instead of an urn. In addition, you can also select any coffin from trustworthy online casket shops like Trusted Caskets, and ask the funeral home to order some specific one.

The process is hassle-free, and you can get it done within a week. But before visiting a funeral home, you should know what you want and be clear about the budget and service you need.

What are the different types of funeral insurance?

When it comes to funeral plans, there are different funeral insurance that you can opt for. You can opt for one that's suitable for you. Here are the types that you can check out:

  • Life Insurance Policy

You can opt for life insurance as it gives you the liberty to choose a beneficiary. After your death, they'll pay your funeral expenses and other costs too. You can opt for a reputed insurance company to manage your life insurance. When you choose a life insurance policy, you can nominate a family member or spouse as a beneficiary. They'll use the funds for the funeral and other expenses on your death. 

  • Burial Insurance

You can opt for a specific type of policy that caters to burial costs. Burial insurance, also known as final expense insurance, is specifically designed to meet funeral and burial cost. In addition, you can also nominate a funeral home as the beneficiary. However, your family might not have the upper hand over it. Also, your family will not get any leftover funds if you nominate a funeral home as your beneficiary.

  • A Trust

Another option that you can pay for your funeral planning is by keeping aside a specific amount in a trust. A trustee will manage your assets set aside for funeral expenses. You should also note that there are two types of trust that you can choose. The two types of trust are:

a) Revocable trust

In a revocable trust, a lump sum is put aside for funeral expenses in trust. Here you can change the beneficiary or trustee at any point in time. In addition, you can also withdraw the cash or cancel the trust at any time.

b) Irrevocable trust

Under the irrevocable trust, you can't transfer or cancel the assets. Once you’ve entered the agreement, you cannot cancel the trust. Also, you will need the trustee's permission to withdraw or null the trust. Hence, it would be best to decide carefully before signing a deal. Choose the one that's great for you and your family.

  • Joint Bank Account

You can also create a joint bank account with your spouse if you’re married. In this account, you can deposit the funds meant for funeral expenses. Through this, they can withdraw cash for your funeral costs without any hassle. They don't have to go through an insurance company to withdraw funds. In addition, if any money is left, then they can pay for other expenses too. 

  • Payable on Death (POD) Account

Payable on death account, also known as Totten Trust, is an excellent option for unmarried people or widows. So, if you're unmarried, you can opt for this trust. You can nominate a beneficiary to manage funds after your death. Also, make sure to get a trustee who will carry your funeral plans honestly.

What are the pros and cons of prepaid funeral plans?

Before opting for a prepaid funeral plan, it would be wise to look at the pros and cons. Understanding the good and bad aspects will help you decide what’s good for you. Here are some of the pros and cons that you can check out:


  • Peace of mind

One of the good aspects of a prepaid funeral plan is to have peace of mind. You don't have to worry about your family paying your funeral expenses or going through the arrangements. 

  • Choose any funeral

When you opt for a prepaid funeral, you have the liberty to choose any funeral type you want. In addition, you can also choose a cemetery plot of your choice. Since you’re paying for all the expenses, you can select any service you prefer, and any funeral casket of your choice.

  • Unchanged price

Opting for a prepaid funeral plan also ensures that the price remains unchanged despite market fluctuations. When you enter an agreement, the price is locked, and it will stay the same even if the market increases. 


  • Fear of funeral home running out of business

One of the negative aspects of a prepaid funeral is the possibility of the funeral home being out of business. Many people have fears about this issue and discourage them from opting for this funeral plan. So, if you're planning to opt for a prepaid funeral, make sure to check their process. 

  • Non-transferable plan

Another negative aspect of prepaid funeral plans is that most prepaid funeral plans are not transferable. It means if you die in a different place, the funeral home you have an agreement with will not transfer the plan to a new funeral home. Hence, it would help to look over contract details carefully before sealing the deal. Some people do not save the contracts with the funeral homes, or not let family members know about the arrangements, and eventually it is very hard to use it, or impossible to find the funeral home the deceassed had contract with, so it could be waste of money.

  • Not refundable

When it comes to prepaid funeral plans, some funeral insurances are not refundable. For instance, if you opt to change the plan or pay differently, then there won't be any refund from their end. So, when you opt for a plan, make sure to read the agreement properly. If the contract agreement is not flexible, you can opt for one that gives more choices.

These are some of the good and bad aspects of prepaid funeral plans. By weighing the good and bad aspects, you can choose what's good for you. Making a prepaid funeral plan is a great way to lessen the burden on your family and cut expenses too. Also, before you enter a contract with a funeral home, you should check their policy and see any loopholes. If you find any issue, you can opt for a different funeral home. It all depends on how careful you are and manages it accordingly.

Are there differences between funeral insurance and prepaid funeral plan?

Funeral insurance and prepaid funeral plans may seem similar, but they're different. They may share some similar aspects, but most of them are different.

A prepaid funeral plan is a process where cash is paid to the funeral home directly after signing a contract. In addition, the funeral home only has access to your money, and your family member doesn't have access to your assets. In contrast, funeral insurance offers more flexibility. Here you can choose a beneficiary to withdraw cash for your funeral expense and other costs. In addition, if there is a leftover of money, then the beneficiary can take it.

Here are some of the features of funeral insurance and prepaid funeral plan:

Funeral Insurance

  • Funeral insurance is flexible, and you can use it anywhere. 
  • You can also gain additional benefits from funeral insurance.
  • In funeral insurance, your money is paid to the beneficiary.
  • The benefit through policy can be divided among organizations or individuals in funeral insurance.

Prepaid Funeral Plan

  • In a prepaid funeral plan, you can't use it anywhere, and it's constrained, and you can use it only from the funeral home you've signed a deal with.
  • You don’t usually get additional benefits in prepaid funerals.
  • In prepaid funeral, money is paid to the funeral home instead of the family member.
  • The policy benefits mainly the funeral home in a prepaid funeral home.

Which is safe: Financial insurance or Prepaid funeral plan?

Both prepaid policy and financial insurance have good and bad aspects. You can opt for the one that suits your preferences. Every individual has different needs and requirements. 

If you’re more into flexibility, then you can choose financial insurance. With financial insurance, you can use your cash anywhere. However, in a prepaid policy, it's limited, and you can use it only in the funeral home you’ve agreed with. 

However, if you want to avoid the hassle of going to an insurance company for withdrawal, then you can opt for a prepaid funeral plan. Your fund is directly transferred to the funeral home in a prepaid policy, and they will manage your funeral expenses and other costs.

Both policies have their pros and cons. Eventually, you have the liberty to choose what's best for you. Many people prefer to keep the money for the funeral in the bank saving account to be on the safe side, and possibly, they are right, since it gives total control of the funds and freedom to use them in any funeral home or buy any funeral casket. You can check out their features and see which is good for you. You should also check their policies before entering into a contract. When you're looking for a safer option, both offer assurance to some level.

However, it's always vital to be careful before entering into any agreement. Hence, it would be best to check the policy process and deals before signing up.

 Blog Author: Tim