Most people that I meet as an insurance agent want to ignore that fact that they will die. Understandably but being ignorant to the facts of life will not hurt you, it will hurt the people you love. The unfortunate side affect of life is death, you will die, I will die and everyone else that you know will die.
This might not be the best way to start my article “10 ways you can pay for a funeral” but I also don’t like starting an article on the premise that this information is only for other people and not you too. You will have to deal with this at some point in your life, that is 100% guaranteed.
“Nothing In Life Is Certain Except Death & Taxes”
Life is not cheap and neither is death. The average basic funeral in 2020 is somewhere around $8500 on the low side but from experience I can tell you I have mostly seen number between $10,000 and $15,000. If you want to be cremated you are looking at around $3,000 to $5,000 for basic services.
Funeral services are just like shopping for anything else in life. You can buy a KIA or you can buy a Mercedes, it’s all up to your taste and budget. Funeral homes are run by great salespeople, if you let them they will create a funeral made for kings and queens. Guilt is a strong selling point, I mean “how much did you love your father, mother or whoever died”?
10 Ways You Can Pay For A Funeral
The first thing anyone who wants to start thinking about being prepared needs to identify the person who will be the one taking care of the bills, most of the time that is a son or daughter.
That person will get the bill no matter what you do. They will have to pay it, if you prepare or not. So, if you right now don’t have a plan in place to pay for your final expenses, please extend the courtesy to that person and tell them “You will have to pay my bills when I die“. That way they can prepare if you do’t care. That was not sarcasm, that is the unfortunate reality that I come across more often then you think.
1. Cash / Savings
Be careful with this one: I know cash and saving might seem like the best way but that is only true if you have access to it. This is OK if you are the spouse you are a join owner of the account that the cash or savings will be used from.
If you are a son or daughter or friend, you will not be able to go to the bank and take out the money. It’s a long process for family member to get accesses to a deceased person bank account and you need the money now. Read number 4 to eliminate this problem.
2. Body Donation
If you want to save money and help someone, donating your body and/or organs is a great way to do that. A lot of people that I meet say they just want to donate their body to science. Unfortunately it’s not that easy and it’s not free. You can always donate organs if you die, you can safe someones life or make someones life easier. The average organ donor save 8 lives when they die. Here is a link if you want to register as a organ donor.
In a process called “whole body donation,” after death, your body could benefit medical research and training instead of sitting in a cemetery. Funeral cost savings is one of the reasons people donate their bodies to science.
Many people choose to donate because they want to see something good come out of their death. But according to researchers, fewer than 20,000 people donate their bodies each year in the U.S.
Interested? More than 90% of prospective donors qualify, and cancer, heart disease, diabetes, and advanced age don’t rule you out. Certain contagious diseases most commonly disqualify people. Severe trauma and obesity may also rule out donation.
If you’re worried about how your body might be used after your death, ask for details before you register. To maximize research opportunities, some organizations send parts of your body to different places.
And some uses, like forensic decomposition studies or trauma studies, might not be part of your end-of-life plan so make sure you plan ahead and ask a lot of questions.
If receiving your cremated remains is important to you or your loved ones, make sure the organization you choose offers that option. And ask about the time frame. It could take weeks — or years — for your ashes to be returned, depending on how your body is used.
Tell your family!!
If you decide to donate your body, let your loved ones know. You should also pre-register with the organization that you want to have your body. This is not a small process, if your considering this you need to research, plan and have it written down in your will so that your family will know what to do.
3. Home Funeral
Most states allow the family to complete the entire funeral process by themselves without hiring a funeral home (Check your State!).
This includes everything from filing paperwork to caring for and transporting the body. (All states allow the family to keep the person at home if death occurred there, to prepare the body, and to hold a private vigil before calling the funeral home for removal.) The cost for this type of funeral would be minimal, and many find this a meaningful way to say good-bye to a loved one.
Here is a (kinda funny) video from “Ask a Mortician” that explains your right.
With the option you will stay have to cost of transportation to the funeral home and the actual burial. But your are cutting a big portion of the bill. Also understand these day not everyone is so comfortable with this option.
4. Payable on death account
This special type of bank account ensures that the funds you set aside for your funeral will be released immediately after your death to the beneficiary you name, without the delay of probate. Unlike a joint account, the beneficiary cannot touch the money while you are alive. These accounts are FDIC-insured, and you can withdraw money any time.
While the account holder is still alive, they will still be able to access the bank account even if a POD arrangement has been set up. The recipient of the funds will simply receive whatever funds were left in the account at the time of the account owner’s death. Payable on death accounts may be called by different names, which include:
- Informal trusts;
- Revocable bank account trusts;
- Tentative trusts; or
- ITF accounts (“in trust for” accounts).
Before you set one up, it can be very helpful to learn some of the pros and cons of POD accounts. Some of the pros of such accounts generally include:
- Ease of Creation: Generally all you need to do to set up a POD account is to inform the bank that you’d like to make your account payable to a specific person upon your death. In addition, it’s usually free to do this. POD accounts also help avoid the costs of probate (the process of property distribution upon the person’s death).
- No Monetary Limitations or Restrictions: There are usually no limits on the amount of money that you can transfer to a beneficiary through a payable on death account.
- Easy to Claim the Money: The recipient of the funds only needs to present the bank with a proof of ID and a death certificate copy to claim the money.
- Multiple Beneficiaries: While you are still alive, you may name as many beneficiaries of your POD account as you would like. The proceeds may be split evenly between all the named beneficiaries, or divided in any manner you prefer. You may also change the beneficiary or beneficiaries of your POD account at any time you like.
While POD accounts have their advantages, they may also be associated with some negative points. Some of the cons and drawbacks associated with a POD account include:
- No Alternate Beneficiaries: You will generally not be able to name an alternate beneficiary for your POD account. This means that if the named beneficiary passes away before you do, your account funds will be distributed to your estate, thus passing through probate proceedings. However, as mentioned above, it is possible (and sometimes advisable) to name multiple beneficiaries for your POD accounts.
- Your POD accounts will only pass through the probate process in the event that all of your named beneficiaries pass away before you.
- No Rights for the Beneficiary: While you are still alive, the beneficiary won’t have any rights to claim the account funds. They can only claim the account funds upon your death. This can create a delay if you happen to change your mind and you want the beneficiary to receive money immediately.
5. Prepaying at funeral home
When you prepay the cost of your funeral, the funeral director places the money into an interest-bearing trust account, and serves as the trustee. After your death, the funds are paid directly to the funeral provider acting as trustee.
An irrevocable trust can’t be changed or dissolved without the permission of the trustee, though you can usually name a new trustee or funeral home if you change your mind or move.
A revocable trust can be cashed out or cancelled at any time.
This option is mostly used when someone is trying to qualify for Medicaid and they need to spend down the funds they still have.
6. Employer Benefits
Some companies have survivor benefits available for the family of the deceased. Also, some unions may offer benefits to help cover or defray funeral costs.
Many companies also have group life insurance on there employees. It never hurts to ask, many HR department can also help you find more assistance.
7. Veterans’ Benefits
All eligible veterans are entitled to burial in a national cemetery, with no charge for the graveside, headstone and vault. The family is responsible for all other charges.
The VA makes additional burial allowance payments in cases of death during active duty, from service-related injuries, in a VA facility, or when veteran was receiving a VA pension or disability. Veterans’ spouses and dependents are also entitled to some burial benefits.
8. Fund Raising
You could try crowd-funding websites like GoFundMe and Indiegogo, which allow individuals to set up pages to request donations. You can ask your local churches for help or sell off any personal items to pay for the services. You can ask family and friends if anyone would be willing to donate some money.
This should be anyone’s last resort of course with so many other options available then to beg for money. Unfortunately, you see it all the time. People don’t prepare for something they know will happen and then the family has to beg strangers to come up with the money.
9. Coroners Office
If you simply can’t come up with the money to pay for cremation or burial costs, you can sign a release form with your county coroner’s office that says you can’t afford to bury the family member. If you sign the release, the county and state will take the body either bury or cremate it.
The county may also offer you the option to claim the ashes for a fee. But if these also go unclaimed, they will bury the ashes in a common grave alongside other unclaimed ashes.
10. Final Expense Policy
This is the easiest and most affordable way to plan for all your Final Expense needs. You can simply buy an affordable Final Expense, Burial or Cremation policy from an Insurance company. All you have to do is pay a small monthly premium and when you die the insurance company will give whoever you decided should be responsible for your bills a check for an amount that you have chosen.
Most of these plans have a benefit amount of between $5,000 and $20,000. You do NOT have to have a medical exam, you only have to answer a few medical history questions. That’s it. The application is short and most are approved in just a few days.
If you have questions about something that is not answered in this article “10 ways you can pay for a funeral”, schedule an appointment with me directly and I’ll gladly help you.