Planning your own funeral is an important part of transitioning into your senior years. As such, signing up for a pre-paid funeral might be a good idea. The costs are covered, sparing your family from any financial burden, and the specific details can be worked out at a later stage — much later. There are many different options and allowances available under a pre-paid funeral plan, so you can be sure that you've chosen the right one.
Contribution-Based Plans
Many plans involve monthly contributions being spread out over the course of several years. This is a contribution-based plan, with the end amount that's available being dependent on these contributions. There will be an advertised amount (the value of the plan) that's available at the conclusion of your contributions, but whether your family is able to access this full amount will depend on whether the end of the intended contribution period has been reached. For example, the amount you pay each month might be intended as part of a ten-year plan, and if you were to pass away before this, the final available amount can be lower.
Third-Party Costs
A contribution-based plan will cover the majority of costs, even when the full amount might not be released due to the length of the plan not being fulfilled. Third-party costs, such as burial or cremation fees, may not be included in your contribution-based plan. A contribution-based plan generally comes with an allowance for these third party costs, but when the cost exceeds the allowance, your family might still have to pay some additional fees when the time comes.
A Guaranteed Plan
A way to bypass any overlooked third-party costs is to sign up for a guaranteed plan. While this can still be paid in instalments, it's different to a contribution-based plan in that it locks in a guaranteed amount at current prices, meaning that the ultimate costs of all aspects of a funeral (even third-party costs) will be covered by the plan, regardless of inflation and the subsequent increase in prices in the years to come. A guaranteed plan can be somewhat more expensive, but this extra cost comes with a guarantee that all costs will be covered, leading to no out-of-pocket costs for your family in the future.
Not all funeral plans are the same, and some due diligence is necessary to be sure that you're getting exactly what you want and what you paid for. For more information about pre-paid funerals, contact a local funeral home.