Funeral Plannings Tips and Strategies

Most people believe that putting together a funeral plan is unnecessary. But with the rising funeral costs, it’s recommended to plan ahead to avoid being overwhelmed by the expenses. Funeral costs can burden your surviving loved ones and drain their bank accounts. If you want to make the process less stressful for them, a funeral plan will help ease the burden.

Being financially prepared for a funeral doesn’t mean you need to buy an expensive package deal. In this blog, we will discuss the median cost of a funeral and the different ways you can cover your end-of-life expenses.

How Much Does a Funeral Cost?

Funeral costs vary depending on where you like and what kinds of funeral services are included. According to the National Funeral Directors Association (NFDA), the average cost of a funeral is $11,000 or more.

Here’s a list of common funeral and memorial-related expenses:

• Basic Funeral Service
• Embalming and Preparation
• Casket or Coffin
• Urn
• Funeral Ceremony
• Hearse and Transportation
• Cremation Fee
• Cremation Casket
• Headstone or Memorial Marker
• Funeral Flowers and Decorations
• Obituary Notices
• Death Certificates

How To Pay Your Funeral Expenses

According to the NFDA, the average price of a funeral and burial has risen by 6.6 percent between 2016 and 2021. With the steady increase in funeral costs, it's always a good idea to preplan. This way, the costs are locked in at current prices. To help you plan ahead, we’ve listed various options for setting up a funeral fund:

Final Expense Insurance Plans

When it comes to end-of-life expenses, final expense plans can provide you with the necessary funds. A final expense insurance is a whole-life policy designed to give small death benefits to beneficiaries. Death benefits are guaranteed for final expense insurance as long as premiums are paid. This lump sum will cover not just the funeral costs but also mortgage payments and credit card debt. With final expense insurance, you can relieve the worries and financial burden of your family members. 

Another benefit of a final expense plan is its cash value component. It builds a tax-deferred cash value over time from which you can borrow. Your cash value grows in a savings or investment account that you can access while you’re still alive.

Payable on Death (POD) 

Also called a Totten trust, a Payable on Death account is a streamlined process of transferring funds and assets to loved ones after you pass away. Basically, you have a legal agreement with your bank regarding your assets. Setting up a POD account is a way to ensure your beneficiaries have a source of ready cash for funeral expenses. 

POD accounts are less expensive and easier to set up. Funds are not subject to the probate process, which means that will be paid directly to the beneficiaries. Opening a POD account is a great move if you want to plan for your final goodbye. 

Savings Account

Another way to save for your end-of-life costs is by stashing funds into a savings account. It’s recommended to set up a joint bank account that’s dedicated to your funeral expenses. 

There are several types of savings accounts to choose from: traditional savings accounts, high-yield savings accounts, and funeral trusts. You can put money aside in any of these accounts and let your money earn interest over time. 

Prepayment Plans

Many funeral providers allow you to prepay your funeral expenses. This can be a great way to ensure that your loved ones have the money needed to pay for your funeral.

The advantage of prepayment plans is that you can make arrangements regarding the type of service, casket, and other related expenses. It gives you peace of mind knowing that your final wishes will be met. 

Moreover, prepaying at a funeral home will allow you to secure today's prices. Most prepayment plans offer inflation protection, which means your funeral costs remain stable. This is a huge benefit as funeral costs tend to rise over time. 

Consult With the Professionals

At Integrity Wealth, we know that dealing with funeral expenses can be daunting. That’s why we’re here to help you make the most informed decision about funeral arrangements. We focus on final expense coverage, home insurance, life and health insurance, and more. Our commitment is to provide valuable advice and guidance to all our clients. For more information, reach out to our staff today!

Disclosures

*This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.  Integrity Alliance, LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.  Past performance is no guarantee of future results.