Financial Planning

A Guide to Funeral Planning

Funeral planning in a time of grief can be difficult, so it is better to plan ahead.

Planning a funeral while grieving can be difficult: You're coping with the loss of a loved one and trying to make quick decisions under stress, which can be challenging.

No one wants to put their family through that pain after they pass. To alleviate the burden, you can turn coordinate funeral arrangements as part of your estate planning while you are still healthy and living. Thinking ahead can allow you to make smart choices that honor your wishes. Here is a guide to make funeral planning less overwhelming for both you and your loved ones.

Funeral planning: Where to begin

Before you can start organizing your memorial service, it's important to understand the financial considerations involved with funeral planning. Here are three to keep in mind.

1. Gather documents.

After your death, your family will need to gather important documents, including your will. You may also choose to leave behind prepaid burial plan documents or instructions regarding funeral arrangements. Many people choose to address their funeral expenses with a pre-need funeral plan or Contently 1 final expense policy. This helps ensure that your final wishes are met and your services are paid for. That way, your loved ones don't have to worry about making financial decisions during a difficult time.

2. Make a list of friends, family members and others to notify.

Create a list of immediate family and other close contacts, including doctors, your employer, religious affiliations and credit card companies that your family should reach out to upon your death. If you are a veteran, your family will need to notify the Veterans Administration and ask about possible funeral benefits.

3. Research funeral home locations and prices.

Treat funeral planning like you would any other big purchase and shop around. The Federal Trade Commission requires disclosure of funeral home costs over the phone, so call around to get quotes. Ask for an itemized list of what's included within a package, such as costs for a casket, cremation container, transfer of remains and preparation of the body. You can work with the funeral director to accommodate your budget, and purchase goods and services individually.

4. Calculate the actual cost.

The average funeral costs between $7,000 - $8,000 just for the basics. This does not include optional services, like the cost of the viewing, memorial services, graveside staff and use of a hearse, among others. While you can have just about any type of funeral you want, you might be surprised at how quickly some of the costs can add up. Be aware of the additional fees associated with a funeral that you may want to factor into your calculations.

Burial insurance

Having life insurance to cover funeral expenses is part of a sound estate plan and one way to manage your final expenses. Burial insurance is typically a whole life policy that provides money to cover funeral and burial costs when you die and can offset any financial hardship on families or loved ones.

Final expense life insurance and pre-need funeral insurance are two common types of insurance that can be used to address future burial expenses.

Burial insurance is generally easy to apply for, but the death benefits are typically low, Contently 2 ranging anywhere from $5,000-25,000 (although some insurers may offer higher limits).

Final expense insurance

Final expense insurance can protect your family from carrying funeral costs, burial fees and even medical bills because the death benefit of your policy is paid directly to your beneficiary who can use the money in any manner. For example, if you have a $15,000 burial insurance policy and funeral expenses came in at $10,000, your beneficiary might choose to use the additional funds to pay for other final expenses such as outstanding medical bills, legal costs or any other outstanding debts you may owe.

Pre-need funeral insurance

With pre-need funeral insurance, however, the death benefit is typically paid directly to a funeral service provider of your choosing rather than to family members. Pre-need funeral insurance can be offered as either a term life policy or type of permanent policy, and the benefit can cover the costs of prearranged expenses, such as standard funeral home services, funeral merchandise, church and burial services.

Funeral planning isn't easy. You can make the process less stressful for your loved ones by planning ahead and getting enough life insurance. 

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

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