The Pros and Cons of Prepaid Funeral Plans | Everdays

The Pros and Cons of Prepaid Funeral Plans

Prepaid funerals are a time and money saver, there is no doubt. With Everdays, prepaying for your end-of-life plans is quick and easy, taking your loved ones off the hook for major financial decisions. But, is there a downside to prepaid funerals? Could they be financially risky like some critics suggest?

In this guide, we’ll go over the many advantages of prepaid funeral plans but we’ll also tackle the most commonly pointed out disadvantages, many of which are outdated or depend on the provider you’ve chosen to work with.

Prepaid funerals may be the answer you’re looking for, so we’re going to examine the pros and cons of prepaid funeral plans, and you’ll be able to make an educated decision and protect your investment.

What is a Prepaid Funeral Plan?

End-of-life planning can become cumbersome with so many small details and vendors to reach out to. Sometimes, we put it off and risk leaving the responsibility in the hands of our closest loved ones, also leaving them to pay more for the services at the time of need as funeral costs continue to rise across the nation.

It’s no wonder prepaid funerals are increasingly in demand. A prepaid funeral plan bundles everything you need and locks it all into a static price. You can pay for your prepaid funeral in full when you plan, or you can pay in installments.

The best part is that with us, you can choose your funeral provider, make the planning decisions that are important to you, and select the prepaid funeral package you want, then complete the process all from the comfort of your own couch.

Types of Prepaid Funeral Plans

There are several different ways you can go about prepaying for your funeral plan. After you’ve chosen your funeral provider, made your planning decisions, and selected the prepaid funeral package that suits you, any payments made are safe and secure. Here are three ways your money is securely put aside for your prepaid funeral.

Pre-Need Insurance Policy

Despite the specialized nature of a pre-need insurance policy, it’s very similar to other forms of insurance. Like any other insurance policy, for example, you’re going to pay premiums on a pre-need policy until your prepaid funeral package is paid in full. This can take several years or you can pay the entire amount in one payment.

Once all premiums have been paid, your prepaid funeral package is fully funded and coverage will remain in place, ready for your family whenever the time comes. Your chosen funeral provider will be the recipient of the payout and will honor your prepaid funeral plan even if prices have gone up since.

Revocable Trust

A revocable trust is an account into which your payments are deposited. The beneficiary is, once again, the funeral provider you’ve chosen who will use the funds to pay for your last wishes as set out in your prepaid funeral package. A revocable trust can be canceled or adapted should you change your mind.

Irrevocable Trust

An irrevocable trust is the same idea as a revocable trust with one small difference. Your chosen funeral provider will still be the beneficiary and use the money within the account to fund your prepaid funeral plan. Your funeral package price will be honored even if prices have gone up.

The difference, however, is that changing the beneficiary or canceling the trust cannot happen without consent from the trustee. This is a more permanent option than a revocable trust with far less wiggle room.

If you are using your preneed policy purchase to help you qualify for Medicaid benefits, you would choose to make your purchase irrevocable so these funds are excluded from your net assets for Medicaid eligibility purposes.

What’s Included in a Prepaid Funeral Plan?

End-of-life planning is a detailed process with a lot to think about. There are many decisions to be made and details to work out. Our prepaid funeral plans pull together all those details in one simple process that you can complete from home. Your prepaid funeral will include all the small customization details that make it your personalized plan. You may find the following Included in your prepaid funeral plan, depending on what you wish to put in place:

  • Your visitation or viewing
  • Your funeral or memorial service
  • Cremation of Burial
  • Transportation to the funeral home and crematorium
  • Professional guidance
  • Service coordination
  • Printed or digital material
  • Flowers
  • Casket
  • Urn

It’s important to be clear on what your chosen prepaid package includes and does not include so that you can make arrangements for everything that is not covered. Your prepaid plan may not include catering for your service or an obituary, for example. You may need to make other arrangements for pallbearers or if you’d like to have your ashes placed in a columbarium.

The Pros of Prepaid Funeral Plans

The upsides to prepaid funerals are many, from the affordability of locked-in prices to the consideration of your family and friends in their time of grieving. It’s easier, quicker and in mere moments you’ll have your funeral planning done from your living room. Let’s take a closer look at some of the biggest pros of prepaid funeral plans.

Pro #1: The Price is Locked in When You Pay

When you choose to prepay for your funeral, one of the biggest pros is that your price is locked in. This is no small thing, ensuring you’ll always be able to afford your funeral plans. In recent years, the prices of funerals, burial, and cremation have risen, meaning that by the time you’re in need of these services, they’re going to be even more costly. With a prepaid funeral plan, you’re locked into today’s prices no matter how much the cost rises in the coming years. This means huge savings for you and for your loved ones.

Pro #2: No Second Guessing

One of the most thoughtful gifts you can leave behind for your family and friends is a funeral that’s been planned ahead of time. This means the responsibility of the event, all the small decisions, and the big, financial questions are all taken care of and your loved ones needn’t worry. A prepaid funeral ensures all of those you love will be free of the burden of planning your memorial and left to focus on their own healing in a time of grief.

Pro #3: Your Resting Place is Reserved

Whether you’d like your final resting place to be next to family and loved ones or you’ve chosen where you’d like to be buried based on the aesthetics of the location, prepaying for your burial plot means that the spot is reserved.

No matter how many years pass between planning for your funeral and the event itself, nor how much the cost of burial plots might rise, you won’t lose that spot. It can’t be sold to anyone else and you’re locked into the price at the time of your planning. You and your family can rest assured your final resting place will be just as you wish.

The Cons of Prepaid Funeral Plans

While there are plenty of good reasons to choose a prepaid funeral for your end-of-life planning, they do have their critics. Some come down on the fact that the money you’ve used to prepay for your funeral is tied up, while others worry about changing your plans down the road.

What if you want to select a new funeral provider or the provider you’ve selected has gone out of business? These are all valid concerns, so let’s take a closer look at these potential disadvantages of prepaid funeral plans.

Con #1: That Money is Tied Up

Once you’ve selected your prepaid funeral plan and it’s all paid for, that money is now tied up in your end-of-life plans. That means you can’t use it for anything else that may come up as the years go on. However, that money has been used to pay for something that is going to come up inevitably. It is far better to pay for it in advance than it is to leave it to your friends and family to work out when the time comes.

A prepaid funeral is just another way to plan ahead, like saving for retirement or your child’s education. That money has paid for something of value that can end up being a lot more costly in the future.

Con #2: The Business Could Go Bankrupt Leaving Your Investment in Question

It is always possible that the funeral home you’ve selected for your prepaid funeral plan ends up going out of business. A funeral provider can close for many reasons. The operator could retire, the company could be experiencing bankruptcy or other financial issues or they could be moving to a different location.

The US has experienced a steady drop in the number of funeral homes around the country in the last ten years, so worrying about your funeral provider closing is a valid concern. It’s important that you feel completely comfortable with your purchase, which is why our Everdays Care Team is always here to help you switch to a new funeral home provider in the event your selected home goes out of business, you move, or you just change your mind.

Con #3: You Can’t Change Your Mind

When you’ve planned out your funeral and prepaid for the package of your choice, your price reflects the services that will be rendered by the funeral provider you’ve chosen. Critics of prepaid funeral plans often point out that in many cases these choices can’t be changed and you’re locked into the funeral provider you’ve chosen, even if you move far away.

However, here at Everdays, changing your mind about your funeral provider is now a reality. Our helpful care team will work closely with you to enable the change of funeral home provider to your prepaid funeral plan if the need arises.

Common Questions About Prepaid Funeral Plans

As prepaid funeral plans are in higher demand these days, more questions arise about the process. So, to supplement the pros and cons of prepaid funeral plans, we’re going to take a look at some of the most common questions that arise about them.

The answer to this question is going to depend on the prepaid funeral plan provider you’ve chosen to work with. Some will offer refunds on your purchases, while others may not. Here at Everdays, we want you to be 100% satisfied with your funeral arrangement package. As such, all of our plans come with the promise of a full refund within 100 days of purchase if you are at all disappointed with your purchase or plan.

In short, yes, prepaid funeral packages are a safe investment. Prepaid funeral plans are locked into today’s price. Your money is secured in a trust account or by a pre-need insurance agency, both of which are safe.

That means your investment is fully protected and will remain untouched until the time comes to use it. So, no matter what the price for services is when you pass, your purchase is honored and your money is immediately paid out to the funeral provider.

While prepaid funeral costs include everything you need for a respectful service, burial, or prepaid cremation, they may not include everything you need. Your prepaid funeral plan may not include death certificate copies, printed material, pallbearers, permits, celebrant fees, catering, transportation for family and friends, or live music.

If your prepaid funeral package doesn’t include a service you’d like to have at your memorial, you will have to make arrangements outside of your prepaid funeral plan.

Anyone is able to preplan their funeral without a prepaid funeral plan. You can set money aside in a trust or savings account for the purpose of paying for your funeral. You can then meet with your funeral provider and select your preferences. Your funeral provider will record your selections. When you pass, your funeral provider will set these choices in motion with payment.

The downside to this is that the price will likely rise between now and then.

Funeral costs have risen steadily over the past few years and are unlikely to stop. With a prepaid funeral plan, you’re locked into today’s prices and are able to avoid the effects of inflation. You may also be able to use your life insurance to pay for your funeral expenses.

However, this will dip into your beneficiary’s payout and they may need to wait months to receive it, meaning your loved ones have to pay for your funeral expenses out of pocket.

A prepaid funeral is a great way to plan the inevitable, relieve your family of these obligations as they are grieving, and save money, time and effort while you do it. Your funds are secured until the time comes to use them and you’re free to change your mind about your funeral provider or other details after you’ve paid.

With Everdays, your purchase is accompanied by a 100-day refund promise should you find yourself at all dissatisfied with your plan. The only true downside is that the money you’ve paid for your prepaid funeral package is tied up but as we pointed out earlier, this can save you or your family from having to pay out more in the future.

So, are paid funerals worth it in the long run? Without a doubt, the answer is yes.

Final Thoughts on the Advantages and Disadvantages of Prepaid Funerals

No one looks forward to end-of-life planning but we all have to do it. Prepaid funeral plans offer a route to planning your final wishes that are painless, quick, something we can afford, and entirely online.

The upsides to prepayment funerals are many and far outweigh any negatives. So, if you’re ready to get planning, reach out to us to discuss the prepaid funeral plan that is perfect for you.

Ease the Burden for Loved Ones by Planning Ahead

Although we might not always think of it as such, end of life planning is an act of love. Provide peace of mind for your family and free them from stressful choices and unplanned expenses in the future. Choosing a prepaid cremation package is one of the most generous gifts you can leave behind for your loved ones.