How To Pay For A Funeral Guide 2023: Here Are All Your Options
For most families, spending over $8k for a funeral is a big financial burden.
And that’s probably how much you’re going to pay for end of life expenses.
So how are you going to cover the costs?
In this guide, I’m going to explain all your best options for paying the cost of a funeral.
It’s always better to plan ahead, but if you need money now, there’s definitely a few options.
Who Pays For a Funeral?
Family members are not required to pay funeral costs. The money for a funeral comes from the deceased person’s estate.
It falls to the family to sell off any assets or liquidate any funds which can be used to pay.
Usually, the person responsible for this task is the executor of the will, usually the closest relative.
Who’s Legally Responsible?
While family members and close relatives often take on the burden of paying for a funeral, they are not legally required to do so.
The only binding legal obligation that exists is in contracts with the funeral home.
For this reason, making arrangements ahead of time is very important.
Can You Be Forced To Pay?
Legally, no one can be forced to pay for a funeral.
If no executor is appointed in the will, then the probate court will appoint someone for this responsibility, usually a close relative.
This person is responsible for selling off or releasing assets from the deceased person’s estate in order to pay for funeral arrangements.
If you’re thinking of prepaying funeral costs, it helps to have a rough idea of how much you can expect to spend.
Of course, funeral costs can vary a great deal, depending on where you live and what kind of arrangements you want.
Here is a breakdown of approximate costs.
Average Cost of a Funeral
Funeral costs have been steadily on the rise for a number of years, and they continue to go up.
Currently, the average cost of a funeral is between $7000 and $12,000.
That number includes a viewing, transportation and burial.
It does not include grave markers or cemetery fees.
Breakdown of Costs By Service Type
When it comes to funeral services, an array of options are available.
You may decide that you prefer cremation over traditional burial, but still want a traditional funeral service. The average cremation cost of this is $10,000-$12,000.
If you just want a simple memorial service and a cremation, these services will run you $8000-$10,000.
The cheapest option is direct cremation, which incurs an average cost of just $2000.
It may be that you prefer burial. Burial along with a traditional funeral service costs about $15,000 on average. Burial costs with a memorial service is about $10,000.
Breakdown of Main Costs
Wondering what gives these services such a high price tag?
Here’s the average price of some of the main funeral costs.
The funeral service
The funeral home will charge you a basic service fee.
This usually includes funeral planning, paperwork and storage of the body. It may also include making arrangements with the cemetery.
This basic service charge averages out to about $2000.
The casket could be the biggest expense associated with a traditional funeral.
They come in a wide variety of materials and sizes. The most common materials for caskets are metal or wood.
Because of this variety, the average cost of a casket can range from $2000-$5000.
Embalming is not required, but is desirable if you’re planning to have a visitation/viewing.
If the body is not being immediately buried or cremated, you will need to choose either embalming or refrigeration.
Although refrigeration is a slightly more affordable alternative to embalming, it can still cost hundreds of dollars.
The average cost of embalming is $600.
The cost of cremation will vary depending on what you want for additional services.
The average cost of a direct cremation (with no funeral or memorial service) is about $2000.
If you want a memorial service or a traditional funeral along with the cremation, the costs are significantly higher (as noted previously).
There are many smaller costs associated with burial, such as flowers, a headstone, and grave liner.
All of these combined will add up to about $9000.
This cost can add up to even more if you opt for a memorial service or funeral.
If you’re planning a burial, you will need to plan on a number of cemetery fees.
These include the purchase of a cemetery plot, which can average anywhere between $1000 and $4000.
Other costs include a burial vault and a headstone.
You can find a more thorough breakdown of cemetery costs here.
How To Pay Funeral Costs
Now that you know roughly how much to set aside for funeral costs, you need to figure out how you can fund the actual funeral. Below you’ll find the most cost effective ways.
One of the most common ways to prepay funeral costs is by using a life insurance policy.
Depending on your situation, this may be the best option.
There are a few pros and cons to consider when deciding if using a life insurance policy is the best decision for you.
How It Works
Although you cannot directly use a life insurance policy to prepay funeral costs, you can earmark the funeral home as the beneficiary of your policy.
It’s also possible to get final expense insurance (sometimes called funeral insurance), which pays out in the specific amount that you would want to pay for the funeral.
The right life insurance policy is a good way to protect you from the rising costs of inflation.
That’s because leaving your dividends in your life insurance policy will increase their value to allow for rising prices.
Most of the time, this increasing value will be more than enough to cover the cost of your funeral.
A final expense insurance policy typically costs between $30 and $70 a month.
This cost can vary depending on your age, gender and health, as well as the company that you choose.
Expect to pay $70-$120 a month if you are over 70 or have any major health conditions.
Pre-Paid Funeral Plans
Pre paid funerals give you the option of making and paying for funeral arrangements ahead of time.
While this might seem morbid to some, in fact it’s a gesture of love to those left behind.
Family members are relieved of the additional pressures of planning and paying for a funeral service in the midst of their time of grief.
How Do They Work?
You can work directly with the funeral home, giving them a plan. The plan can be as detailed as you like.
The cost of making these arrangements can range from about $10,000 to about $25,000. This amount is paid in monthly installments.
Some funeral homes give you the option of a trust-based pre-payment plan.
Your payments are deposited in an account which accumulates interest until your death.
Then it can be accessed by your family members in order to pay for your funeral.
Funeral trusts may be either irrevocable (a permanent contract) or revocable (which allows you to change your mind and get a refund).
Pros and Cons
A funeral trust is a good choice if you want to ease the burden on your survivors. The fact that your money generates interest can mean more value on your investment.
But be aware that the funeral home is only required to put 60% of your payments into your trust. And it can take 10% or more out for administrative fees.
In many cases, you can secure a personal loan which can be used towards funeral expenses.
How It Works
To get a funeral loan, simply apply as you would with any other personal loan.
The funds are not required to be used for funeral or burial expenses. You can use them in any way you need to.
Advantages and Disadvantages
Funeral loans have a huge advantage in that they can be accessed quickly. And you have some control over the amount and the timing of the monthly payments.
One problem with funeral loans- they tend to have very high interest. The interest rate will depend, in large part, on how good your credit is.
You can place funds in a bank account set up ahead of time to use for funeral expenses.
This is a great way to protect your assets from funeral homes, who can’t always be trusted to use the money exactly as you want.
There are a couple of different ways you can do this.
You can set up a joint savings account, shared by you and a loved one.
This makes funds immediately available to your family after your death.
Just remember that you will have to make regular deposits to ensure that the money will be adequate to cover all your costs.
Payable On Death Account
You can work with your bank to set up a “Payable On Death” account, in which you name a family member (or perhaps the funeral home director) as the beneficiary.
Then just continue to deposit funds as needed, and your loved ones will have immediate access to the money they need after your death.
This is a method of raising money for funeral expenses by asking for donations from the general public.
A large number of people each contribute a small amount of money towards the cause.
The Internet can be a helpful tool for spreading the word about a crowdfunding venture. Crowdfunding platform like Go Fund Me can help you raise money with friends, family, and the public, to cover funeral costs.
Paying If There’s No Money
As you’ve figured out by now, it’s very expensive to die.
Yet people without money die all the time.
So what do you do if you need to plan a funeral…and there’s no money to pay for it?
There are some avenues open to you if you find yourself in this predicament.
Funeral Assistance Programs
There are organizations which offer assistance to those who face funeral expenses they did not anticipate.
Here are a few places to look.
National and local charities
There are a number of charities, both on the national and local level, that exist to help with unexpected funeral costs. These include Final Farewell and Children’s Burial Assistance.
On the local level, reach out to churches and to memorial societies. You can also call 211 to get connected with local organizations.
Social Security Administration provides a one-time death benefit of $255 to a surviving spouse or child. In addition, the Federal Emergency Management Agency (FEMA) can provide assistance to anyone whose death was the result of a natural disaster.
On a state and local level, a portion of your Medicaid benefits can be set aside to help pay for funeral expenses.
As a last resort, you can call your county coroner to explain your situation. In some desperate cases, the government can pay for burial or cremation; however, you might not be able to have the ashes returned to you or have a grave site that you can visit.
You will be surprised at the range of prices available on items such as caskets, flowers and cremation urns.
Often you can get the best deal by completely bypassing funeral home merchandise and ordering items from third-party retailers like Amazon or Walmart.
Donating the Body to Science
By donating your body to an educational institution or organization for research, you cut out all burial and cremation expenses completely.
The organization that does the research will cremate the body and return the ashes to loved ones within about two or three years.
Check Veteran’s Benefits
If you or your deceased loved one is a U.S. veteran, check with your local VA office for any military benefits that might come your way.
You may be eligible for a tax-free cash payment to use towards burial, cremation and funeral expenses.
Have a Direct Funeral
Direct cremation and direct burial are the lowest end-of-life options possible.
The body is cremated or buried immediately after death, making embalming unnecessary.
You can also eliminate expenses associated with a funeral or memorial service.
Have a Home Service
Instead of using a funeral home, many families opt to have a private service in their own homes.
This saves money and also gives family members more time to spend with the deceased loved one.