Even though it’s inevitable for all of us, many of us don’t like talking about death. So talking about our wishes for funeral or cremation arrangements is an uncomfortable subject for not only us, but our families as well.
But, it’s important to have plans in place – especially if there are things you very much want for your funeral or cremation, burial or disposal of your cremains. The only way you can be comfortable that your wishes are carried out is through preplanning.
Preplanning doesn’t necessarily mean prepaying. If you simply want to have your final arrangements known in advance – down to the type of ceremony and casket – you can do that without paying a dime. Putting your wishes in writing is the best way to make sure there is no confusion about your intentions at the time of your death.
As always, make your loved ones aware that you have put your wishes in writing and let them know where they can find that information. A good place to put it is with all of the other important documents you should prepare before you die.
If you do decide to prepay for your funeral or cremation expenses, there are a few ways you can do it.
Preneed Funeral Insurance
Preneed funeral insurance is usually tied to a specific funeral home, crematorium or funeral service provider. Preneed funeral insurance is a type of whole life insurance, that is, a policy that remains in force throughout the insured’s life. It accumulates cash value and has a built-in growth rate. Our preneed funeral insurance locks in your future costs at today’s prices – but be aware that not all funeral home policies do.
The first step is to choose a provider. If you don’t have a specific funeral home in mind, meet with several and compare plans before making your decision on funeral insurance. All funeral homes in our area offer some sort of preplanning program and all are priced competitively.
Once you decide on the funeral home and sign a preneed contract, a preneed funeral insurance policy will be issued for the same amount as your preneed contract. We place funds in an Irrevocable Mortuary Trust account, in accordance with state law. This trust is insured and the funds gain interest, which we maintain in the account to offset future price increases.
Final expense insurance
Final expense insurance isn’t tied to a specific funeral home. You can choose – and change – your funeral home at any time. These policies also cover other final costs aside from funeral costs. The advantage of final expense insurance is that this type of policy often has lower premium payments than preneed funeral insurance policies. The down side is that these policies accumulate little or no cash value.
Final expense insurance can either be whole life insurance or it can be term (temporary) life insurance that provides coverage only for a specific period of time and only pays out if you die within that specific period.
You can set up your own burial trust fund, known as a “Payable on Death” trust. It’s done at a financial institution – bank or credit union – and is simply a bank account. It earns interest and is very flexible: You can close the account, change banks or change the beneficiary at any time. Upon your death, it is paid out to the beneficiary, you named, who then uses the money to pay for your funeral expenses.
However you decide to do it, preplanning ensures that all of your final wishes will be fulfilled. When you prepay it provides you and your family additional peace of mind in knowing that expenses will be covered. It’s the best gift you can leave your loved ones.
This is an overview of the alternatives available. Be sure to talk to your funeral home, lawyer and/or tax advisor before entering into a contract.
* * *
Phaneuf Funeral Homes and Crematorium offers preplanning and payment options to fit your needs. To get more information, click here.