How to Pay for a Funeral? Get Burial Insurance

If you are wondering how to pay for a funeral you are not alone. Consumers know the high cost of a funeral these days and even more so as the years go on and inflation gets higher. This means funeral services are going to get more and more expensive this is why making sure you have the money to pay for your or your loved ones funeral is so important.

The average funeral expenses at the time of death are $7,640 and can skyrocket to $9,000 when including a vault.

Source: bankrate.com

These costs still vary depending on the funeral home. The cost of transporting the body, embalming fees, memorial services, etc. All play a part in the total cost of the burial.

This is why burial insurance is the best option for seniors especially seniors on a fixed income. Now there are 5 different ways to pay for a funeral.

5 Different Ways to Pay for a Funeral

  1. Prepaid Funeral Plans
  2. Life Insurance, Final Expense Plan, or Burial Insurance
  3. A Personal Account or CD or Pay on Death Account
  4. Credit Card or Personal Loan
  5. Crowd Funding Website (Gofundme)

Prepaid Funeral Plans

This is what is also known as Preneed Insurance, it is a prepaid funeral plan contract funded with an insurance policy, trust, or annuity. It essentially allows you to predesign your funeral and locks in the cost of the funeral services to protect against inflation. You can either pay this funeral off in one lump sum or do monthly payments over time.

Now the monthly payments will pan between 10 – 30 years depending on how much you pay and the arrangement made with the funeral director.

Here’s the thing, what if you die tomorrow?

The reality is if you die before all of your payments have been made to cover the costs your family is left with a big funeral bill that has not been paid for. If the funeral director did get you preneed insurance that is an actual life insurance policy because they can do that, then you are good to go but with only a prepaid burial this puts your family at risk.

Life Insurance, Final Expense Plan, or Burial Insurance

Burial Insurance or final expense life insurance is the best option to protect your family from the burden of burial and funeral expenses. The reasoning being is because for a small monthly payment you can get policies up to $35,000 in coverage.

You can also customize these policies to fit the exact expenses for your funeral they pay within 24 – 48 hours of deaths occurring with a certificate of death. This means they are designed to pay out very quickly to provide your family with the peace of mind they deserve.

In addition to this these policies can be used for anything from burial, cremation, paying off debts, or simply leaving money behind for your family. They also provide cash value which is an additional saving in your policy you can borrow against if you should ever need to.

There are also additional policy riders that provide extra benefits such as insurance for grandchildren.

A Personal Account or CD or Pay on Death Account

This type of account leaves your assets to your named beneficiary without having to go through probate. The issue with this is every year that goes by the purchasing power in the account goes down. These accounts also do not offer enough interest to offset inflation.

Source: funeralbasics.org

Credit Card or Personal Loan

Of course, you can use credit cards to pay the funeral or take out loans but this is what subjects you or your family to financial hardship. They may have been able to pay for your funeral but now they are in debt and have to find a way to pay it off which causes an emotional strain at the worst time in their lives (losing you).

This is exactly what burial insurance is designed to protect against and preserve your family’s peace of mind so they can just focus on grieving you.

Crowd Funding Website (Gofundme)

This is what a lot of families wind up with without proper preparation. Resorting to crowdfunding not only puts the funeral on hold but also puts an emotional strain on families trying with the embarrassment of asking for money. No one wants to ask for charity and the humiliation that comes with that is carried around for years to come.

Who has to Pay for a Funeral?

Funeral expenses are paid out of the deceased person’s estate with an executor being responsible for making sure the burial costs are covered by assets or property.

Source: funeralocity.com

That being said the surviving family members of the deceased person always want to make sure their final wishes are honored.

Will Social Security pay for a Funeral?

Social Security will provide a payment to be used for funeral expenses in the amount of $255 if certain requirements are meant.

Source: retireguide.com

So no it will not pay for the funeral because $255 is like throwing a needle at a brick wall. You can also check with your local social security office for more information.

Will the VA Pay for a Funeral?

The VA will pay a burial allowance to an eligible veteran’s family to offset burial and funeral costs.

  • Death that occurs in a VA facility it will pay $828 for the allowance and $828 for a plot.
  • Death that occurs in the line of duty the burial allowance is $2,000 and may reimburse for the cost of transporting remains.
  • Death that occurs outside of service receives an allowance of $300 and $828 for the plot.
  • If there is an indigent with no family, the VA will give either a casket or urn interment in a VA national cemetery, tribal or veterans.

Source: military.com

Again this is like throwing a pin at a brick wall as far as making sure burial expenses are covered. There is no VA form to fill out that will help. This is all a veteran that served our country gets.

Best Burial and Life Insurance Companies to pay for a Funeral

  1. Mutual of Omaha
  2. American Amicable
  3. Prosperity Life
  4. Royal Neighbors of America
  5. Aetna
  6. Guarantee Trust Life
  7. AIG
  8. Great Western

Example Pricing

ParamountQuote Example Quotes Ages 50-85 
AgeMale $10,000 Coverage Monthly RateFemale $10,000 Coverage Monthly Rate
50$29.16$24.67
51$30.30$25.45
52$31.12$25.88
53$32.20$26.62
54$33.61$27.47
55$35.09$28.40
56$36.45$29.27
57$37.91$30.06
58$39.27$30.83
59$40.82$31.70
60$42.76$32.87
61$45.38$34.51
62$47.90$36.06
63$50.52$37.72
64$53.14$39.36
65$55.76$41.01
66$59.35$43.44
67$62.93$45.86
68$66.53$48.29
69$70.11$50.81
70$73.70$53.24
71$78.36$56.63
72$82.92$60.12
73$88.01$63.93
74$93.16$67.78
75$99.53$72.41
76$106.87$78.25
77$113.64$83.51
78$119.86$88.44
79$126.23$93.41
80$132.65$98.43
81$143.00$106.21
82$153.54$113.96
83$163.41$121.31
84$173.28$128.55
85$183.15$135.90

Conclusion

Burial insurance is the best option to pay for a funeral compared to all other methods. The policies travel with you if you die outside of the state. They pay quickly and in a large sum that you specify they guarantee peace of mind.