We don’t want to think about it but it is an understood fact that we are going to diet and pay for the funeral expenses at some point. With the expenses of traditional funeral running higher, we should plan for it just we plan other major expenses. Instead of creating a burden on your family or loved ones, establishing a funeral financial plan is one of the best ways to make the funeral process less stressful for them.
Most people think that they can just set a particular sum of money aside in the will for the funeral. But the survivors won’t be able to get and use that money for funeral costs until your estate wends its way through probate.
That’s why it is coming up with other ways to cover your funeral costs is a good idea. Below are some ideas you can consider to cover your final bill (funeral costs) yourself.
Prepay Funeral Expenses
There are many funeral homes that allow people to prepay for their funeral expenses. The benefit of doing this is that you can pay for your own funeral even when you are alive. It helps you leave not a funeral burden on your loved ones or family to worry about. By doing so, you are also able to lock the price to eliminate the risk of getting prices higher in near future.
But, prepaying for funeral costs in advance can also be problematic if you need to move away from your current residence due to some reasons. Or the funeral home unable to keep their operations continues. In such situations, your family might be responsible to get your body back to the funeral home or need to pay your full funeral expenses in case the funeral home goes out of the business.
Purchase Funeral Insurance
As the name suggests, funeral insurance is a type of insurance policy designed to help loved ones of a deceased to pay for the funeral. Many people these days invest in funeral insurance to give their loved ones peace of mind when they are passed away. So they can cover the funeral costs without borrowing money from any other. While most people usually use the policy benefits to pay for funeral and memorial services, they can use that money for anything like to pay out a debt, household expenses, or fulfill other financial needs as well.
A Designated Funeral Plan Savings Account
If you don’t want to repay for the funeral and also have sufficient life insurance, setting up a saving account for funeral costs is another best way to cover the costs. Such accounts usually earn a lower interest rate than you can get by investing your money somewhere else. You can also invest in certificates of deposit. CDs can earn you higher interest and you can continue rolling your money until you need it.
Payable-on-Death (POD) Account
POD or Payable on debt account is a bank account that helps you put some money aside for your final bills like a funeral or an unpaid debt. Your family will need to show your death certificate to the bank and get the money back. This is not a joint account and the beneficiary cannot get the money until you are no more. That’s why you should nominate someone as a beneficiary you can trust to use the money in the right way.
If all the above-mentioned options are not a right fit for you because of the tight budget, you should look at cheaper alternatives like at-home funerals and green burials, etc. As a result, your family will need to pay a short amount of money in terms of funeral costs without feeling overwhelmed.
Experts highly recommend the advance funeral financial planning as it makes the funeral arrangement process easier for your loved ones. Whether you are about to purchase funeral insurance or prepay for funeral expenses, you should shop around to find out the best option available.