What are your options on how to pay for a funeral or cremation?

Cremation network

Funeral services can be expensive. The National Funeral Directors Association estimates the average funeral cost today at $7,848, 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.

Keep funeral costs down

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 spending 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.

Cremation Funeral

How can I pay for a funeral?

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 for 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 pre-need 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 pre-need contracts purchased 20+ years earlier can sometimes fall short on funeral costs today, and you may need to supplement the funds.

Life Insurance Policy assignment:

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 incontestable. 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 estate:

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, which 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 that the costs for the funeral are well-covered. This is another reason why a vital aspect of pre-planning 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.

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What other options are available to finance a funeral?

Credit financing – a funeral loan:

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, but you will also 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 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 HELP card to its members.

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 disputes amongst the family if there is disagreement about the services arranged and multiple members are contributing.

Organizing a fund-raising event:

Suppose 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. In that case, you may be able to organize a fund-raising event to help pay for 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 help:

There are still some charities that will make charitable donations 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 care costs.

Accident compensation or Victim Compensation:

If the deceased was involved in an accident or was the victim of a crime, there may be some assistance.

Embassy/Consulate help:

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 much practical assistance. If you are an immigrant in the U.S., you may find your own Embassy may help with repatriation costs.

Are there 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 neediest or destitute to ensure their disposition is taken care of. If there is a program in your state, you must contact your nearest Human Services office to find out the details and apply. Use this link to our Guide to Social Assistance by State.

US Funerals Online has information detailed about help with funeral expenses in our Funeral Planning Guides for each state.

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 trouble.

We have tried to outline some of your options for paying 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.

Related Articles:


Burial Insurance
DFS Memorials – Pre-registration
Social Security Lump sum death payment

Written by

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 15 years.