A Complete Guide to Funeral Preplanning: Saving Costs & Easing Burdens

Preplanning is not exclusive to burial, cremation, and other end-of-life arrangements. Think about prepaid college tuition plans, 401(k) and other retirement plans, insurance premiums, or a layaway plan for big-ticket items, like furniture or diamond engagement rings. 

Planning and paying for a funeral ahead of time can bring several practical and emotional benefits for you and your loved ones. The biggest obstacle – and the reason why so many Americans want to preplan but don’t – is that funeral preplanning requires us to accept the inevitable fate for all of us: death. It’s going to happen. 

So why not save yourself and those you leave behind (spouses, partners, children, grandchildren) the emotional and economic distress by planning ahead? You’ll find everything you need to know, with actionable steps, in our complete guide to preplanning.

Funeral Preplanning Glossary: Key Terms Explained

Knowing the terms and phrases associated with preplanning can help make you feel more at ease. Here is a glossary of the most commonly used terms related to preplanning.

Funeral Preplanning: Making arrangements for a funeral or end-of-life services in advance. Also known as: 

• Advance arrangements
• Advanced planning
• Prearrangements
• Prepaid arrangements 
• Future planning
• Pre-need arrangements
• Preplanned arrangements

Funeral Expenses: The costs associated with funeral services, including but not limited to casket, urn, memorial service, burial or cremation fees, and other related expenses.

End-of-life Wishes: Personal preferences regarding how one's body should be handled after death, the type of funeral or memorial service, and any specific requests for the disposition of remains.

Preneed Insurance/Prepaid Funeral Plans: Financial instruments or contracts designed to cover funeral expenses. This can include prepaying for specific services or purchasing insurance to cover future costs.

Funeral Director: A licensed professional who assists in planning and coordinating funeral services. They often work with families to make arrangements and ensure the funeral proceeds smoothly.

Casket: A rectangular-shaped box, usually made of wood or metal, that contains the body of a deceased person. Caskets have handles to respectfully transport a loved one for a viewing, visitation, graveside service, burial, or cremation. 

Cemetery Placement: Also called permanent memorial or permanent memorialization, it is a place to bury or place a casket or urn (if cremated) permanently. Includes a traditional grave plot, mausoleum, columbarium, and other options in a cemetery or cremation garden.

Cremation: The process of reducing a body to ashes through combustion. This is an alternative to traditional burial.

Memorial Service: A ceremony to remember and celebrate someone’s life; also called a funeral, funeral service, and celebration of life. It might be religious or secular and may or may not involve the presence of the deceased person's body.

Graveside Service: A funeral service held at the burial or interment site.

5 Money-Saving Benefits of Funeral Preplanning

The cliche “what goes up, must come down” does not apply to the cost of most consumer goods, including funeral costs. According to the U.S. Bureau of Labor Statistics, prices for funeral expenses were 69.78 percent higher in 2022 than in 2003. In other words, over 19 years, the average funeral cost nearly $7,000 more. 

5 Money-Saving Reasons to Preplan

Planning and paying for funeral arrangements in full or over time is a proven way to save money for you and your family. 

Inflation Protection

Preplanned funeral arrangements allow you to secure current prices for funeral goods and services, protecting you and your family from the impact of inflation. As funeral costs tend to rise over time, securing a prearranged plan ensures you pay today's prices, potentially saving a significant amount in the long run.

Reduced Financial Burden on Loved Ones

Preplanning your funeral allows you to allocate funds specifically for the expenses associated with your end-of-life arrangements. This can alleviate the financial burden on your loved ones, sparing them the stress of covering unexpected costs and allowing them to focus on mourning and healing.

Emotional Spending Avoidance 

Planning a funeral during a time of grief can lead to emotional decision-making and overspending. By preplanning, you make financial decisions in a calm and rational state, avoiding unnecessary expenses that might arise from emotional stress and urgency.

Payment Flexibility

Many preplanned funeral arrangements offer flexible payment options, such as installment plans or one-time payments. By spreading the cost over time, you can manage your budget more effectively and avoid the financial strain that may occur if the expenses were to be paid all at once during a crisis.

Fee Protection

Funeral costs may include fees subject to change, such as cemetery fees or administrative charges. By preplanning, you can often secure not only the prices of goods and services but also protect against potential future fee increases, providing an additional layer of financial security for you and your family.

Paying for Your Funeral Ahead of Time: Options Explained

There are several options for paying for your end-of-life plans, including life insurance, burial insurance, and prepaid funeral plans:

• Life insurance is generally the most expensive but provides broader financial protection to beneficiaries. However, receiving a life insurance payout can take several weeks or longer, so you can’t count on that money to pay for a funeral. 
• Burial insurance is explicitly for funeral expenses, but some burial insurance plans may have a waiting period before the full death benefit is payable. 
• Unlike life or burial insurance, prepaid funeral plans allow you to secure future arrangements at today’s prices. However, changing or modifying your plans might be challenging if your preferences or circumstances change. 

It's important to carefully review each option's terms, coverage, and conditions to determine which best suits your needs and preferences. 

How Do You Know Your Prepaid Funeral Plans Are Safe?

Most states have strict requirements to safeguard prepaid plans, with state-regulated trusts to ensure your investment is protected. Prepaid plans are highly regulated, and funeral homes must put your money in a state-regulated trust. Even if the funeral home where you made your future arrangements changes ownership or goes out of business, your plan is safe, with guarantees in place.

How Do You Make Your Preplanned Arrangements?

You can make preplanned arrangements online, over the phone, in person, or combination. Reputable funeral homes and cremation providers have preplanning advisors with special training and certification, such as the NFDA Certified Preplanning Consultant (CPC) Program. These caring and compassionate professionals are a reliable source of information and usually offer free consultations.

Find a Provider

An excellent place to start is by researching funeral homes in your local area. You can use online directories, search engines, or ask friends, family, or colleagues for recommendations. 

Consider the reputation and reviews of funeral homes. Online reviews and ratings on platforms like the Better Business Bureau can provide insights into the experiences of other families.

Compare Services 

Evaluate the range of services offered by each funeral home. Some funeral homes may specialize in certain types of services or have expertise in cultural or religious practices.

Ensure the funeral home provides the specific services you require, such as traditional funerals, cremation services, or green burials.

Look at Prices

Under the Federal Trade Commission (FTC) Funeral Rule, funeral homes and cremation providers must provide a General Price List (GPL). This is a detailed price list of all the services and products offered, including basic fees, caskets, urns, transportation, and additional charges.

Consider Location

Consider the funeral home's location in relation to your home and the chosen burial or cremation site. Will it be convenient for your family to pay their respects? Do they have a perpetual care plan? Evaluate the funeral home and cemetery facilities regarding price, offered services, and accommodations for specific burial or interment requests. 

Ask About Payment Plans

You can often pay for prepaid arrangements over time. These payment plans are typically available with a three, five, or 10-year plan. Understand the terms and conditions of any preplanning agreements, including the flexibility to make changes if needed (such as paying it off early without penalty).

How Do You Choose Between Burial and Cremation?

One of the most significant factors in your preplanned arrangements is burial or cremation. So how do you choose? 

To be clear, there is no right or wrong decision when considering burial or cremation. It is your choice to follow your personal, cultural, or religious beliefs. Historically, burial was the preferred option for generations of American families. That trend has shifted dramatically toward cremation. According to the National Funeral Directors Association (NFDA), the national cremation rate is around 60 percent and is expected to climb to 80 percent by 2045. However, there are still many individuals who prefer burial. 

Keep in mind that whether you choose burial or cremation, you can still have:

• Visitation or viewing (rental caskets are available if you choose cremation)
• Traditional funeral in a funeral home or house of worship
• Cemetery placement with a permanent memorial

Burial and Cremation: A Quick Comparison

Burial:

• Traditional and Cultural Significance: Burial has deep-rooted cultural and religious significance in many societies, providing a sense of tradition and continuity.
• Fulfillment of Religious Beliefs: For individuals with specific religious beliefs that favor burial, it provides a way to adhere to these customs.
• Potential Family Plot: Family burial plots foster a sense of connection and continuity over generations.
• Higher Cost: Burial costs are typically higher due to expenses such as caskets, burial plots, headstones, and cemetery maintenance.
• Land Use: Traditional burials consume land, which can be a concern in densely populated areas.
• Funeral Timeline Often Shorter: Traditional burials with a memorial service usually must occur within a few days after passing. 
• Limited Permanent Memorial Options: Casketed remains are buried below or placed inside an above-ground mausoleum. 
• Environmental Impact: Some environmentalists argue that traditional burial practices can have adverse environmental effects, particularly with certain embalming chemicals.

Cremation:

• Cost-Effective: Cremation generally costs less than traditional burial, especially when choosing direct cremation. 
• Fulfillment of Religious Beliefs: Some religions prefer followers to be cremated. 
• Flexible Memorials: Although cremation typically occurs within a few days after passing, you can have a memorial when it best fits your schedule. 
• More Permanent Memorial Choices: Cemeteries, cremation gardens, and columbariums offer many customizable options to bury or inter cremated remains. 
• Flexible Memorialization Options: Cremated remains can be stored in various ways, offering flexibility in memorialization options, such as scattering, urns, or keepsakes.
• Space Efficiency: Cremation is more space-efficient, making it a viable option in areas where land use is a concern.
• Environmental Impact: Flame cremation contributes to environmental carbon, a known component of climate change. 
• Perceived Impersonality: Some individuals may feel that cremation lacks the personal touch associated with traditional burials.

What Do You Do With Your Finalized Preplan Arrangements?

Many people create a broader end-of-life plan when they make preplanned funeral arrangements. You want to be sure that your next of kin or attorney has everything they need to carry out your wishes as you approach the end of your life or if you become incapacitated. 

• Write down the name of the funeral home where you made your arrangements.
• Make a copy of your preplan contract and give it to your next of kin, physician, healthcare provider, or attorney.
• Keep another copy of your preplan contract with your other end-of-life documents. 

Final Document Checklist

1. Will: Clearly outline how you want your assets distributed and who will fulfill your wishes (executor).
2. Living Will (Advance Healthcare Directive): Specify your preferences for medical treatments and interventions if you cannot communicate.
3. Power of Attorney: Designate someone to make financial and legal decisions on your behalf if you cannot do so.
4. Healthcare Power of Attorney: Appoint someone to make medical decisions if you cannot make them yourself.
5. Financial Documents: Include information on bank accounts, investments, debts, and insurance policies.
6. Life Insurance Policies: Provide details on your policies, including beneficiaries and coverage.
7. Property Deeds and Titles: Include documents related to property ownership, such as deeds and vehicle titles.
8. Passwords and Access Codes: Create a list of essential passwords for digital accounts and devices.

So Many Reasons to Preplan, Time to Start

Preplanning your funeral offers financial and emotional comfort for you and your loved ones. Taking the first step is difficult, but you will be glad you did. None of us want to burden our loved ones with additional stress and expense when the time comes. We invite you to begin exploring our resources and contact one of our compassionate family service advisors for a free, confidential consultation.