Pre-Paid Funeral or Cremation Plans: Benefits & Disadvantages

What is Included in a Pre-Paid Funeral?

Services in prepaid funeral plans vary by funeral home and contract. but they generally include:

• Burial or Cremation of Remains (as part of a burial plan or cremation plan)
• A Casket or Urn
• Burial Plot
• A Headstone or Grave Marker

Other provisions can often be added to your preneed funeral contract, such as:

• Visitation Services
• Religious Ceremonies
• Transportation for Loved Ones
• Photography Slide Shows
• Publishing of Obituaries

The Benefits of Pre-paid Funeral or Cremation Plans

Here are some benefits of entering into a pre-paid funeral or cremation plan with a local funeral home.

Locked In Pricing
With prepaid funeral plans, you lock in today’s prices, protecting against rising costs in the future. This is particularly advantageous given the steady increase in funeral expenses.

Peace of Mind
Many seniors choose preplanning funerals to relieve their families of stressful decisions during an emotional time. A preneed funeral contract ensures everything is taken care of, allowing loved ones to focus on their grief.

Services Can be Stipulated
A prepaid funeral plan lets individuals specify the type of service they want, ensuring their preferences are honored without leaving decisions to family members. For example, a prepaid cremation plan.

Secured Final Resting Place
If a senior wants to be buried or interred in a specific spot in a cemetery, the desired resting place can be stipulated and reserved in the pre-paid funeral or cremation agreement.

Disadvantages of Prepaid Funerals or Cremation Plans

There are a number of possible disadvantages of purchasing a pre-paid funeral or cremation plan, including:

• Business Stability of the Funeral Home
  The effectiveness of prepaid funeral plans depends on the funeral home. If a funeral home closes or declares bankruptcy, there’s no guarantee the contract will be honored..
  
• Lack of Portability
  Most prepaid funeral plans near me are tied to local funeral homes. If you move out of the area, transferring the plan may be costly or impossible. Refunds in the industry are rare..
  
• Inflexible Contracts
  Contracts for prepaid cremation plans are often strict, making changes difficult or impossible once signed. Seniors and their family members should read a contract carefully and request that an attorney review it.
  
• State Law Variations
  Consumer protections for prepaid funeral plans or cremation contracts vary by state. Research your state’s laws and evaluate whether prepaid funeral expenses are tax deductible to avoid surprises later. Purchasers of plans should carefully evaluate what state based legal protections they have before entering into a contract.