As the costs of the average burial or cremation increase, affording the ability to lay our loved ones to rest can feel more and more unattainable. To help you get started, we’ve answered the top questions we hear from our customers, friends, and family:
- How much do I need to save for a funeral?
- What is final expense insurance?
- Are prepaid funerals a good idea?
- How can I start saving now?
How Much Do I Need to Save for a Funeral?
Determining an adequate budget for a funeral depends on what kind of service you want and the average cost of living in your state. There are the traditional options of burial and cremation, but there are also emerging funeral services that may be more intriguing to you. Death does not always have to be so somber, so have some fun considering how you’d like your life to be celebrated.
Burial: The average burial costs between $5,000 and $10,000 as of this year. This doesn’t include higher-end options such as a vault burial or a high-end casket. Spend some time researching your options to nail down a number, or plan to set aside at least $7,500 if you want to cover basic costs.
Cremation: Much more cost-effective than burial, cremation will set you back anywhere from a few hundred to a few thousand dollars. Prices for urns can reach the sky, so it may behoove you to pick one out now.
Green Burial: Have you heard of green burials? Bodies are not prepared or cremated, but placed in a biodegradable container and allowed to fully return to nature. Average costs run from $1,000 – $4,000, which includes a one-time endowment to maintain the burial property.
What is final expense insurance?
When planning ahead for your funeral, you may have come across certain insurance terms, like final expense. But what is final expense insurance? Also called burial insurance, it’s a type of coverage offered by final expense insurance companies for end-of-life costs. Rather than a large life insurance policy of more than $50,000, final expense insurance offers smaller, more affordable life insurance plans that have enough funds to help loved ones cover burial costs and potential other small final expenses.
Figuring out your additional potential final expenses now may be a bit tricky, but some things to consider are what kind of debt you may still have, the amount of assets that may remain, and potential large expenses that will have to be paid, such as end-of-life medical care. If you want more insurance coverage than just your final expenses, you can look into life insurance plans for seniors to determine what size plan you want.
Are Prepaid Funerals a Good Idea?
On the other hand, prepaid funerals are exactly what they sound like. You pay a funeral home the current cost of the type of service you would like and they set it aside for when it’s time to be used. There are several pros and cons to this approach, so consider it carefully before making a decision.
Pros to Prepaid Funerals
There are two major advantages of prepaying for your funeral. One, you don’t have to worry about not being able to afford it in the future. Life is incredibly unpredictable, and while we may be financially secure right now, we have no idea if that will remain the case for the rest of our lives. The second advantage is that you pay what the cost of a funeral is now. Remember how we mentioned the rising costs of final expenses? Prepaying lets you lock in your rate now and avoid price hikes.
Cons to Prepaid Funerals
Just as there are two advantages, there are also two disadvantages to prepaying for your funeral. The first is that you may not live in the same area then as you do now. This leaves family to bear the costs of transportation and travel. The second disadvantage is that there is no guarantee the funeral home will exist at that future point. When considering prepaid funerals, ensure you choose a long-standing funeral home to help mitigate this possibility.
How Can I Start Saving Now?
Besides getting final expense insurance or going the prepaid route, you will have to start putting money aside to save for your funeral costs. Here are some quick tips to getting the most out of your savings plan.
- Work backwards from a save-by goal date to figure out how much you need to put aside each month.
- Find room in your budget to save by looking for ways to cut or lower everyday expenses.
- Pick a savings account with higher returns and low risk, such as a brokerage account.
- Make sure whatever type of account you pick is inaccessible to avoid the temptation of removing any funds.
- Set up automatic withdrawals from your checking account into your savings account to simplify the savings process and make success more likely.
Learn More About Americo, the Final Expense Insurance Experts
For decades, Americo Senior Life has been offering peace-of-mind final expense insurance to Americans across the country. Our quick application process is easy and hassle-free. Most of our policies do not require a medical exam, only answers to a few medical questions. You get lifetime coverage and your rates will never increase. Ease your mind from worrying over final expenses and get an online quote from Americo today.