can be expensive. The National Funeral Directors Association estimates
the average cost of a funeral today at $7,755 (NFDA 2012), and for those
who simply have no cash resources, paying for funeral expenses can put
them into crisis.
Traditionally funeral homes
would ask for “cash advances” when negotiating a funeral contract with
a customer. Cash advances had to be paid upfront when the contract
was signed, and were the ‘out-of-pocket’ expenses that the funeral director
would need to pay to third parties. These are generally things like
the death certificate, the burial or cremation permit, crematory fee or
cemetery fees, obituary notices and funeral flowers. However, the
remainder of the payment for the professional services rendered by the
funeral home would be payable within an agreed time-frame.
The recent tough economic
times have impacted upon the funeral industry as more people have struggled
to pay funeral expenses. More funeral homes have been left with bad
debt when families have simply been unable to pay, and this has led to
more funeral homes demanding full payment before the funeral takes place.
How can I pay for a funeral?
The most important thing
to do if paying for a funeral is a worry to you, is to keep the costs as
low as possible. You can still arrange a dignified and celebratory
funeral service without having to spend thousands of dollars. Consider
cremation as an option – this undoubtedly keeps costs down. Make
sure you shop around and compare funeral costs. If possible enlist
a friend or relative to help you negotiate the best price. In most
areas of the U.S. you should be able to arrange a basic direct cremation
for around $1,000 and a basic burial for around $3,000.
Cash or Check:
Paying with cash or check
at the time of need is how most people deal with paying for a funeral.
Although many within the funeral industry will encourage us to pre-plan
and purchase a pre-need funeral plan, this does not always guarantee the
best discount of funeral services ahead of time. Paying with cash
can give you some negotiating power. Funeral directors are caring,
compassionate professionals but they are also business people. Purchasing
a funeral is a consumer transaction just like any other consumer purchase
you make, so you should approach it the way you would any other purchase.
Do not disclose what your actual finances or budget is. Make sure
you know comparable prices from local funeral homes. Do not feel
under pressure to make an instant decision. Do not feel embarrassed
about bartering for deals -overpaying is NOT dignified. Do not be
coerced into purchasing ancillary products and services. There are
so many families who are up-sold to, in fact it has been quoted that some
funeral homes “up-sell to 60% of customers”. Remember being forewarned
is being forearmed!
Pre-need funeral contract
or funeral insurance policy:
If your recently departed
had pre-purchased a funeral contract from a funeral home or insurance agent,
then this can alleviate a lot of your concerns about paying for the funeral.
A preneed funeral policy is assigned to cover the cost of the pre-arranged
funeral contract and the monies are invested to ensure that they can meet
the future needs of your contract. However, it has been known that
preneed contracts purchased 20+ years earlier can sometimes fall short
on funeral costs today and you may need to supplement the funds.
Life Insurance Policy
Funeral homes will accept
payment via a life insurance assignment. If your loved one had a
life insurance policy you will need the details of the insurance company
to verify to the funeral home that you have a genuine policy that will
pay-out and cover the funeral costs. The policy must have been held
be over 2 years to be uncontestable. You do not, and indeed
should not, disclose the value of the life insurance policy as the funeral
home does not need to know this. They merely need to be able to contact
the insurance company to confirm that the policy in question covers the
funeral expenses. Do not agree to sign over the insurance policy
in lieu of the funeral expenses – you could find your funeral costing as
much as your policy value!
Funds within the deceased’s
The difficulty with an unexpected
death is that arrangements may not have been made for surviving family
to manage the deceased’s estate. This is obviously further complicated
if the deceased had not even made a will. The estate is subject to
Probate and it can take time to release funds. A funeral home may
be willing to negotiate with you if you can provide reliable evidence that
there are funds in the estate and the costs for the funeral are well-covered.
This is another reason why a vital aspect of preplanning and putting your
affairs in order, should involve setting up a Payable-on-Death (POD) account,
or Totten Trust, that is not subject to Probate and a named beneficiary
in the family can access the funds immediately.
anyway. There are
a number of specialized companies that will lend for funeral payments,
but you will need to have some good credit standing. A number
of these companies offer their services through funeral homes. Be
sure to fully check the terms of any funeral financing agreement.
Amounts between $1,000 and $10,000 can be funded with interest rates of
around 15%, and terms of up to 36 months. You can finance all or
part of the total funeral costs. Even the NFDA endorsed an At-need
Financing Provider earlier this year, by promoting the HELPcard to its
options are available to finance a funeral?
Credit financing – a funeral
Borrowing money to pay for
funeral costs is not generally a good idea. Not only can it can be
very hard to keep up repayments on a purchase such as a funeral, you will
find that obtaining financing for a loan for a funeral is not always easy.
Most ordinary lenders are reluctant to finance funerals. No one should
have to go into debt to bury or cremate his/her lost loved one. Those
that are the hardest hit and simply have no cash funds to pay for a funeral
are generally those that cannot get credit
Spreading the funeral
costs between family members:
If there simply is no money
in the deceased’s estate to pay for a funeral, then family members may
decide to divide the costs between them. If you have kept your funeral
costs down and can split this amount between several family members, this
can make it more realistic to meet the expense. However, this can
lead to conflict and dispute amongst the family if there is disagreement
about the services arranged and multiple members are contributing.
Organizing a fund-raising
If your lost loved one was
a well-loved member of your community and/or you belong to a community
with a strong sense of community commitment, you may be able to organize
a fund-raising event to help pay towards the funeral costs. Community
fund-raising has always been a great way to rally folks together and encourage
everyone to contribute, no matter how small. However, these days
money is a little tight for everyone and many people have become less able
to contribute to fund-raising events.
Charitable and community
There are still some charities
that will make a charitable donation towards funeral costs. It is
very important to manage a charitable donation, and ensure that this does
not reflect in an increase in the range and cost of funeral services.
Employer or Union Benefits:
You may want to check what
other employee benefits the deceased had. Sometimes an employer or
Union may have a benefits package that provides some assistance with death
or Victim Compensation:
If the deceased was involved
in an accident or was the victim of a crime, there may be some assistance.
If as an American, your
loved one has died overseas, you may be able to obtain assistance from
the U.S. Embassy or Consulate where he or she died. They generally
cannot help with actual funeral costs, but they can provide a great deal
of practical assistance. If you are an immigrant in the U.S. you
may find your own Embassy may help with repatriation costs.
detailed about help with funeral
expenses in our Funeral Planning Guides for each state.
government or municipal programs to assist with burial or cremation costs?
Yes, there is the Social
Security lump-sum death payment of $255, but only if you qualify for this
payment. There are also Indigent Burial Assistance Programs offered
by many counties across the United States. These programs are largely
funded and operated to cope with those most needy or destitute to ensure
their disposition is taken care of. If there is a program in your
state, you will need to contact your nearest Human Services office to find
out the details and apply. US Funerals Online has information
You will have very limited
say over the services offered. Traditionally a basic direct burial
was conducted with the deceased buried in a state-run ‘pauper’ or indigent
cemetery. These days cremation is becoming the alternative, as it
is cheaper. If the local county funds a disposition and makes a payment
to the funeral home, you cannot generally pay some extra to upgrade the
services. This is considered fraudulent and if the funeral home accepts
additional payment to offer some incremental service, they could get in
We have tried to outline
some of your options for how you can pay for a funeral or cremation.
There are undoubtedly some other options depending on your circumstances,
nationality and financial standing. If paying for a funeral for a
loved one is a worry for you, do talk to family and friends about your
situation, and above all, do not allow yourself to be drawn into spending
more money than you can afford. Use DFS Memorials to locate your
nearest low-cost cremation provider, arrange a simple direct cremation,
and conduct your own memorial service.
||Expert Author: Sara
Sara is the Editor in Chief
for US Funerals Online and has been researching and writing about the death
care industry in the US for the last 5 years.
Memorials – Pre-registration
Security Lump sum death benefit
Last Revised: 12/19/2012