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Do Funeral Homes Have Payment Plans?

Being able to pay for something in installments is a luxury that many are surprised to learn does not apply to the funeral industry. Many funeral homes do not offer repayment plans and expect to have their services paid for before the services are performed. Struggling to come up with a thousands of dollars at a moment’s notice is not an uncommon experience to those who are planning a funeral, so it’s important to know your options.

Funeral home payment plans

For the most part, funeral homes want customers to pay upfront and before any services are held. There have been many instances where a funeral home performs the services only for the family to not pay for the services after the fact. In order to avoid this, families are usually required to pay for the funeral upfront. That being said, it’s always a good idea to ask about and consider your options. You can always speak with your funeral director about payment plans or repayment options they’d be willing to consider for your situation, even if it doesn’t end in you securing a repayment plan. It may be beneficial to be able to provide your funeral director with proof that you can afford the funeral (by showing them a paystub, for example) but that you’re unable to pay upfront.

Unfortunately, since most funeral homes do not offer payment plans and expect you to have the funds upfront, it can put many families in a difficult position. How can you have a funeral if you simply can't afford it? What do you do if you can't come up with the money in time? Due to the time sensitive nature of funerals, it's important to know what kinds of alternatives you have to pay for unexpected funeral expenses.

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Funeral loans

A funeral loan is a personal loan that is used to pay for funeral expenses. A funeral loan can be a good idea if you’re able to pay for the funeral, but are unable to pay for it upfront. Here are some things to consider when looking at funeral loans:

Pros:

  • A funeral loan can come in handy when you need emergency funds and have exhausted most other efforts.
  • If you have good credit, a funeral loan can be relatively easy to procure at a decent interest rate.
  • Some funeral loans have promotional interest rates that lower the initial rate or eliminate it entirely during a short period of time. This can be really useful if you intend on and are capable of paying back the loan in a short amount of time.
  • A funeral loan can come in customized amounts, so that you’re not borrowing more than what you need.

Cons:

  • A funeral loan is still a personal loan and requires a credit check and credit pull. Inquiries on your credit will usually lower your credit score.
  • There’s the possibility of entering into a bad loan contract. Being taken advantage of can happen if you’re not paying close attention to the terms and are in a state of grief, which is likely to happen after just losing someone.
  • You’ll eventually have to pay the loan back. If you aren’t able to afford a funeral, taking out a loan to pay for it can put you into debt that’s difficult to get out of. Personal loans often have high interest rates.

Prepaid burial plans

A prepaid burial plan or preneed burial plan is when you or your loved one makes a payment plan with the funeral in advance. Preneed burial plans function very similarly to a savings account, except they’re only usable at the funeral home you sign the contract with. Here’s what to consider when looking at prepaid burial plans:

Pros:

  • A prepaid burial plan is a great way to put your family’s mind at ease when it comes to funeral planning, since they’ll know which funeral home to work with and what your desires for services were. (You could also accomplish this by notifying your family of your wishes in advance.)
  • Prepaid funeral plans allow you to set aside money now, instead of all at once at the time of death.
  • Having a plan in place (some funeral homes will record a plan without accepting advance payment) with the funeral home will lift the financial burden off of your family so that they don’t have to be concerned with the stress of paying for the funeral at the time of passing.
  • You can lock in current costs and avoid inflation rates.

Cons:

  • Prepaid burial plans are almost always nontransferable, meaning if the funeral home goes out of business before the preneed burial plan is used, you’re out of luck.
  • If you change your mind at a later date regarding your burial (for instance, maybe you don’t want to be buried and instead want to be cremated), you may not be able to do that depending on the contract.
  • If the deceased dies elsewhere, especially out of state, it may be difficult to work with the funeral home or be logistically difficult.
  • These funds are locked in with the funeral home and cannot be invested elsewhere. If you chose to open a savings account with the explicit purpose of saving for a funeral, you’d be able to use your funds to invest elsewhere, if needed.
  • There may be different features or services available at a later date, after you’ve already locked into a funeral contract.

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Alternative funeral financing assistance

If you’re uninterested in taking out a personal loan or don’t have a preneed plan, you can find alternative methods of financing a funeral.

Crowdfunding & community support

If you’ve recently lost someone, chances are your community is looking for ways they can support you. Most people want to help those close to them, especially during times of need or difficulty. Struggling with funeral expenses is not an uncommon experience and a burden that can be shared by many instead of just one. You can turn to your community to crowdfund money to cover unexpected funeral expenses. Many families have seen their friends, families, coworkers, and distant relatives come together and support them, enabling them to pay for a funeral in full without having to pull out a loan. You can get started with a fundraiser in under 10 minutes.

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Social Security death benefit

Social Security pays out a one-time death benefit to the next of kin or a qualified family member when someone passes away. The $255 payout can help cover some of the funeral costs and can be applied for over the phone, by calling 1-800-772-1213.

Veterans benefits

Veterans benefits apply to eligible service members and can vary depending on whether the veteran was in a VA hospice at the time of death, whether the death was service or non-service related, and when the death occurred.

For a service-related death, the VA will pay up to $2000 for funeral expenses and will also cover transportation and some additional expenses. You can find more information about VA benefits on their website.

The VA will pay up to $796 towards funeral expenses if the Veteran was hospitalized by the VA at the time of death and the death was non-service related.

To apply for VA Benefits:

Government assistance

Many counties, cities, and states will offer funeral assistance or burial assistance to those in need, especially for those living below the poverty line. While the amount of funds you receive and type of assistance offered varies based on your state, city, and county, it’s worth looking into all three levels of government assistance.

Ways to save money on a funeral

In any case, it’s worth looking into ways that you can save money on a funeral if you’re in charge of planning one. Funerals are often much more expensive than they need to be which can be avoided if you know pricing and what services you want to go with. Here are some ways to save money when planning a funeral:

Consider cremation over a burial. A traditional burial is the most expensive type of funeral service you can have (when compared to other methods of disposition), averaging at around $9,000. Going with a cremation, especially a direct cremation, will lower that cost significantly, averaging at around $2,300 for a direct cremation without services.

Compare your provider options. Doing your research before signing a contract with a specific funeral home can save you hundreds of dollars. Check out reviews and information on pricing before you walk in the door so that you’ll know what to expect. Keep in mind that you can always opt out of services and are not required to go with any full packages a provider may offer.

Purchase products online. Funeral homes make a lot of profit off of marking up big ticket items, such as caskets. Avoid paying more than you need to by purchasing funeral products online directly from the vendors. Your funeral home will be required to use whatever items you purchase, even if they’re not from them.

Use the internet to your advantage. Alongside purchasing products online, the internet is a great way to save money on smaller purchases. Publishing an obituary online will save you around $200 and provides you with an unlimited amount of space and tons of extra features. Skip the physical funeral announcements and opt for an online announcement to save on printing fees and to keep your family and friends in the loop.

Organize and plan the memorial yourself. It’s entirely possible to plan and organize a wonderful service for your community to attend all on your own. You can hold the memorial service in a public space (or turn to your community for available spaces, at a discount or for free) to avoid rental costs.

In need of funeral assistance? Start a memorial fundraiser and get help from your community. Hundreds of families have had their services paid for in full by their community, simply by starting a fundraiser and sharing it. Ever Loved memorial websites come with an online version of a guestbook, a tab for posting about important life events, a section for organizing funeral event information, and much, much more -- all for free.

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Last updated October 27, 2021
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