How To Pay for a Funeral on an Installment Plan
If your family, like so many others, would find it challenging to pay upfront and in full for your funeral, cremation or burial, it helps to know there’s a simple way to lessen the burden: paying in advance on an installment plan. Planning ahead for end-of-life expenses can bring you and your loved ones peace of mind now and less stress later.
According to the National Funeral Directors Association, in the United States in 2023, median costs ranged from $6,280 for a cremation with a viewing and memorial service to $9,995 for a funeral with a viewing, service and vault. When cemetery costs are factored in, the total median cost of a funeral or cremation can exceed $10,000. Even simple cremations with no service can exceed a family’s savings.
When you die, your family is responsible for your funeral, cremation and cemetery costs. These expenses can be surprising and overwhelming for many families. Planning in advance allows you to make manageable monthly payments over time, so you save your family from the financial and emotional burdens of a large expense during a challenging time.
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One man’s prepaid funeral plan story
A few years ago, Larry Refsland experienced the deaths of both his mother and mother-in-law in the same year. Since their passing, Larry has reflected a lot on the differences between the two funeral experiences. “After my mother-in-law’s funeral, we owed $9,000,” he says. “After my mother’s, we owed nothing.”
While both women were on the same fixed monthly income and had similar living expenses, Larry’s mother made monthly payments on prearranged services. Larry’s mother-in-law had no such plans, and her family had to cover the bill for her funeral expenses on the spot.
Choosing a prepaid funeral plan and paying on an installment plan can ensure your family and loved ones don’t find themselves in a similar situation.
In this article, you will learn:
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How to pay for a funeral or cremation on an installment plan
How to pay for end-of-life expenses with a prepaid funeral plan
How to pay for end-of-life expenses with a life insurance policy
Information on last-resort options for paying for funeral expenses
How to pay for a funeral or cremation on an installment plan
When someone dies without a prepaid funeral or cremation plan, that person's family has to pay the funeral home in full when they make final arrangements. Planning ahead of time allows you to pay for funeral or cremation costs in manageable monthly payments.
Another option for covering funeral or cremation costs is an insurance plan, including final expense insurance and pre-need insurance. Although these types of plans are commonly known by several names, including burial insurance and funeral insurance, they're actually life insurance plans. They can help provide financial flexibility so families can cover the sometimes unexpected costs of end-of-life arrangements. They can also be less than ideal.
Paying for end-of-life expenses with a pre-need funeral plan
Funeral homes, cremation providers and cemeteries don't typically offer payment plans at the time of need, but most let families pay in installments for plans purchased ahead of time. Pre-need plans take the financial burden and emotional guesswork out of a difficult time in life.
A pre-need plan, also called a prepaid plan, allows you to be specific about your final wishes. With such a plan you can select the goods and services that fit your taste and budget and lock in funeral costs at today’s prices.
To get started, take the time to ask yourself a few questions and make some key decisions about your wishes:
- What kind of service would you like—traditional funeral or celebration of life?
- Would you like a viewing or visitation ahead of the service?
- Would you like to be buried or cremated? If you want to be cremated, do you want traditional flame cremation or water cremation? Would you like to choose human composting or body donation instead?
- If you’d like cremation, would you like your ashes to be scattered? If so, where? Or would you prefer they be buried or placed in a mausoleum, columbarium or other cemetery memorial?
- If you'd like to be buried or placed in a mausoleum, which cemetery will you choose? Do you have a preference for a headstone or other memorial?
Next, talk with your spouse, partner or close family and friends about your wishes. Let them know you're thinking about these things. They may have ideas or suggestions. If you want to be buried or memorialized with or near your spouse, partner, family member or friend, bring it up. Proximity is the main reason families purchase cemetery property ahead of time.
Once you outline your wishes, you can meet with a planning advisor to discuss arrangements. An advisor can help you choose the products and services that support your vision.
When you’re creating your plan, you decide what type of funding works best for you. If you want to make payments, you decide how much and how long you’ll make contributions. When you feel comfortable with the plan you’ve created, you sign a contract and make your first payment.
Making funeral payments over time is part of holistic financial planning. You’re acknowledging your current budget as well as the future needs of your family. Paying at current rates through regular installments protects your family from inflation. You’ll also give them the gift of knowing exactly what kind of funeral and burial you want, so they won’t have to guess.
Paying for end-of-life expenses with a life insurance policy
If you carry life insurance, it may cover some or all funeral, cremation and/or burial costs. Monthly insurance premiums allow families a manageable way to cover funeral and burial costs slowly and over time.
The downside of life insurance is that it can take a month or longer to pay out. In the meantime, funeral, cremation and/or burial costs will still need to be paid. Families have to find the funds, wait for the insurance plan to pay out and then reimburse themselves. It’s also possible to misinterpret a life insurance policy or not realize it has expired.
The types of insurance policies families often use to pay for funeral or cremation expenses include:
- Term life insurance offers temporary coverage, usually with a timeframe between 5 and 30 years. If you die during this time, your beneficiaries receive a payout. Term life insurance is most often carried by adults with dependent children or mortgages. Older adults don’t usually choose these plans, either due to issues qualifying or high premium costs. If you’re planning for your final expenses to be covered by term life insurance, ensure your policy is current and confirm when it expires.
- Whole life insurance covers income replacement and end-of-life expenses like funeral costs and medical bills. It covers you until death, as long as the premiums are paid. Premiums are typically higher than term life insurance, and payout amounts are usually lower. To qualify, instead of an exam, a medical questionnaire can be completed, but some health conditions can still prevent older people from qualifying.
- Final expense insurance, also called burial insurance or funeral insurance, is considered whole life insurance. It pays a lump sum upon death to cover funeral costs, but it doesn’t necessarily cover the full cost of funeral expenses. If you don't know what you want for your funeral or are hesitant to discuss your wishes with a funeral provider, it’s an alternative to a prepaid funeral plan. However, it doesn't lock in prices, and it doesn't make your final wishes clear to your family.
Last-resort options for paying for a funeral or cremation
If a loved one dies without a prepaid plan, that person's family may find themselves scrambling to quickly pull together the money to pay for a memorial service. This can feel absolutely overwhelming and distressing during an already emotional time. If you're facing this situation, take heart—there are some resources available.
Here are some additional ways to cover funeral or cremation expenses:
- A credit card. High interest rates make this a risky option, but some families do take this route.
- A bank loan. If you have good credit and are comfortable with taking on debt, you can apply for financing at a bank or credit union. This process can take time when time is of the essence.
- CareCredit: The company offers flexible financing options to qualifying applicants. It works like a credit card for certain expenses, including funeral, cremation and burial, allowing you to pay for funeral costs over time.
- A family pool. Family members can pool their money to help with funeral costs.
- Crowdfunding sites like GoFundMe allow family, friends and even strangers to contribute to covering costs.
What affects funeral and cremation costs?
There are hundreds of decisions that must be made when planning a funeral, cremation or memorial service, and making funeral arrangements can often seem confusing or overwhelming. Because there’s no one-size-fits-all approach to planning a funeral or memorial service, there are different costs and expenses to consider. Learn what to expect and get your free Guide to Understanding Funeral and Cremation Costs today.
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