When most people think about their financial future, it’s usually with retirement in mind. But what happens when you die? And if something were to happen to your loved ones, how would they pay for your funeral expenses? It’s a question that no one likes to think about, but it is important, nonetheless.
The average cost of a traditional burial is around $7,000 – and that doesn’t even take into account such things as individualized services (such as embalming) or headstones. So, if you’re not financially prepared for death today, you might be in serious trouble tomorrow.
Let’s face it — most people don’t like thinking about death because of its inevitable connotations with aging and death. However, being prepared empowers you to set yourself up for whatever may come later on down the road, whether it means dealing with a funeral service or having enough resources and money to provide comfort during difficult times.
And with many specialized financial services offering options to get loans for bad credit, you certainly won’t be left wanting for alternatives. To learn more about how you can protect yourself from unforeseen financial problems in your future, keep reading!
1. Take Part in a Payment Plan Offered by a Funeral Home
The first way to finance your funeral is to contact your local funeral home and sign up for their deferred payment plan. What exactly is a deferred payment plan? Well, instead of paying for your funeral all at once (which could be financially taxing on those you leave behind), some funeral homes offer families an option to spread out these expenses over time — sometimes even years after your death.
While not every state allows these types of plans, some funeral homes will work with you to come up with terms that fit within your budget without jeopardizing future funds available for other expenses, as well as ensure you don’t fall into financial ruin during times of grief and stress.
So take advantage of a deferred payment plan when offered; it’s one less thing for your loved ones to worry about after your final goodbye. In addition, participating in such a program gives you ultimate control over how much money will go towards what items and services, ensuring no excess or wasteful spending occurs.
2. Pre-need Insurance
The second way to finance your funeral is by purchasing a pre-need insurance policy. What is pre-need insurance? Well, it’s essentially an agreement between you and an insurance company that provides financial assistance when faced with funerary expenses in exchange for premium funeral insurance payments made on a monthly or annual basis — no matter how old you are, where you live, or how healthy you are at any given time (or aren’t). While these plans offer financial security and protection against high funeral costs if needed, they do come with additional fees associated with them, such as sales taxes, maintenance fees, and management fees — so be sure to consider all of these factors before enrolling in one.
In addition, remember that most states have specific laws regarding pre-need contracts; most require insurers to show you exactly what types of services they’ll provide in case there’s a death — from basic services like burial plots and embalming to more complex items like memorial services, and ordering a headstone from a monument company in Xenia Ohio, etc.
3. Payable-On-Death (POD) Account
The third way to finance your funeral is by opening a payable-on-death (POD) account. What is a POD account? Well, instead of naming a primary beneficiary, you can choose to name anyone as secondary beneficiaries on certain accounts — including bank accounts and retirement funds.
If you’re making an inheritance payment from a payable-on-death account or setting up a trust, you should be aware that there are different types of POD designations in place depending on which state you live in; for example, some states allow POD designations at any age while others require you to be over 18 years old in order to make such decisions and planning for later on down the road.
In addition, not all estate plans will allow you to use a payable-on-death designation; since they’re typically less flexible than other instruments; so it’s best to confirm with your financial advisor before proceeding with one.
No matter what type of account you decide on, though, remember that if anything were to happen before paying off funeral expenses entirely, then whatever was left behind would transfer over into another person’s hands automatically.