When you start thinking about life as a finite thing, it's only natural to want to make sure your plans are in order. Many people start making plans for the inevitable as young professionals. We get life insurance plans, name godparents for our children, and write living wills to be updated occasionally as property and circumstances change over time.
Pre-planning a funeral is a similar way to make sure your affairs are in order, even long before you expect to need a funeral. For many, this is a way to ensure that if the worst does happen, there are plans in place to take care of your loved ones. However, there are also many myths and misunderstandings about what pre-paid funeral plans really are, how they work, and when they are most valuable to you.
We're here to clear up 5 of the most common misconceptions with the greatest possible clarity so you can plan ahead in a compassionate and informed way.
- Myth #1: Life Insurance Will Cover Your Funeral Costs
- Myth #2: Your Money is Better Off in the Bank
- Myth #3: You'll Be Out of Luck If...
- Myth #4: You'll Get a Hard Sell to Upgrade
- Myth #5: Funeral Planning Could Be a Burden on Loved Ones
Myth #1: Life Insurance Will Cover Your Funeral Costs
Many people mistakenly assume that their life insurance coverage will also cover the costs of their cremation or funeral expenses. However, this is a common misconception, that unfortunately, leaves many families high and dry when the time comes to pay for final expenses.
Truth: It can take months to receive a life insurance payout, and funeral homes require payment at the time of services.
Most people don't know this, but life insurance and funerals do not mix. Life insurance is a slow process requiring a legal death certificate to claim. It can take weeks or even months after the passing of a loved one for a life insurance policy to be distributed. However, funeral costs are needed at the time of service.
You will want to make additional plans in order to cover the cost of your cremation and funeral services. Funeral insurance is a separate type of policy that you can take out with a funeral provider. The insurance funds are dedicated to the cost of your funeral arrangements and are payable immediately upon a claim, and are not subject to the delays of a life insurance policy.
Myth #2: Your Money is Better Off in the Bank
Is it better to let money appreciate in an interest-bearing bank account or invest in a pre-paid funeral plan? This is an interesting financial question that is the root of a common pre-paid funeral myth. Inflation means that the cost of funerals is going up. Year over year, transportation and storage costs, urns, and costs associated with cremation services increase their prices to keep up with inflation. Historically, funeral goods and services have outpaced the Consumer Price Index.
Truth: Pre-paying for your cremation today locks in today's rates.
When you purchase a funeral plan ahead of time, you lock in your cost at today's prices. This can ultimately save you and your loved ones a few hundred to a few thousand dollars in costs when your funeral eventually takes place.
Additionally, unlike other investments you may have, you will not pay taxes on your policy growth, and the money placed into a prepaid cremation policy does not count as an asset should you enter a nursing home. This means it cannot be touched by the state in order to cover your care expenses.
Myth #3: You'll be Out of Luck If...
- You Move Away
- The Funeral Home Goes Out of Business
- Your Payments are Incomplete
There are several pre-paid funeral myths that suggest you will lose out on the money you've prepaid for funeral expenses if unexpected circumstances occur. You may have heard that if you move away, your family will have to return to the funeral home you initially arranged with.
There's another myth that if the funeral home goes out of business, your account, plans, and money will be lost.
The last myth is that if you miss a payment or don't complete payments, you won't have a funeral when you pass away. All of these are untrue.
Truth: Your Funeral Plans are Secured and Transferable
Some funeral homes hold your money in a trust payable to the funeral home. The issue with this is that it provides the funeral home with unfettered access to these funds. While rare, there are accounts of funeral homes misusing these funds, or going out of business with little recourse for the client.
At After.com, your funds are secured in a funeral-dedicated insurance account managed by an established insurance provider. Premiums are paid directly to the insurance carrier. Your money is safe from misuse and scandal because it is a dedicated insurance policy. If you move away, you can ask that your funeral funds be transferred to a local funeral home. If the funeral home goes out of business, they will transfer your funeral insurance to another provider nearby.
It is also important to know that in most circumstances, all current accounts will be honored. If you pass away before all payments are made, your insurance may cover the costs of your final expenses, as long as you are outside of the mandatory two-year contestable period. If for some reason you are not current on payments, the amount of your premiums paid-to-date will still be available for your cremation and funeral services. Any remaining balance will be a lesser amount to be covered by family at the time of arrangements. Likewise, if there were any excess funds remaining from the policy, that money would be returned to the family.
Myth #4: You or Family Will Get a "Hard Sell" to Upgrade
There is a lingering stigma against funeral planning in general, with the idea that funeral directors often deliver a "hard sell" for grander and more expensive details than you need. A hard sell is a high-pressure sales technique; one that has fallen out of acceptable practice for most within the funeral industry. The more common tactic today is a failure to mention costs as plans are being made.
One of the great advantages of planning ahead is time to weigh costs and make careful decisions. Because many funeral homes do not disclose their pricing up front, look for a provider with transparent pricing and no hidden fees. This will allow you to build the funeral process and experience you want without surprise-costs or subtle up-selling for you or your family when the time comes. With After.com, we offer simplicity when you need it most. There are no hidden fees or upsells, just straightforward, simple pricing.
Myth #5: Funeral Pre-Planning Could Be a Burden on Loved Ones
Finally, many people have feelings about pre-paid funerals and early funeral planning that may not align with reality. You may worry that funeral planning is too morbid and your loved ones will be upset to find out you've taken care of your own funeral plans. We've found that while this is a real consideration, it's usually opposite from the truth.
Truth: A Pre-Planned Funeral is a Gift to Grieving Loved Ones
In the moment of grief, most people don't have the time or mental clarity to plan the perfect funeral. Your loved ones will sincerely want to know what you would have preferred, from the color scheme to the music selection. You will not be there to ask, but your pre-planned funeral will let them know what you would have preferred. This is a way to take the stress off your grieving family and send them one last message of love and consideration for their needs during a time of loss.
Give your family the gift of ease and that last personal touch. Give yourself peace of mind, knowing that your affairs are neatly wrapped up should your passing come tomorrow or 40 years from now. Consider a pre-paid funeral plan, held in an insurance policy for your benefit whenever it may be needed.
For an affordable pre-paid cremation without the hidden costs, After.com can help you arrange everything you need. Contact us to learn more.