A final plan defines your wishes for final needs and manages final expenses. When cremation is chosen for final needs, the final plan may include a simple cremation (cremation without funeral services; also called direct cremation) or cremation with funeral services.
Final expenses vary tremendously based on additional services. Direct cremation is a very affordable cremation, however, coming up with a couple thousand dollars to cover a low cost cremation is still problematic for some families. When a funeral or memorial service is included, families need to manage thousands of dollars more in expenses.
All these services are tremendously valuable so services shouldn’t be chosen based on cost alone. Instead, individuals and families should plan a meaningful service befitting their faith and preferences, and find a way to manage final expenses.
When sufficient cash to cover the cost of cremation is not expected to be immediately available, prepaying the cost of cremation or purchasing final expense insurance makes sense.
With a prepaid cremation, you contract with a funeral home or crematory and pay cremation expenses today with the agreement that cremation services will be provided at the time of death for that payment. This offers a cost advantage in that you often pay today’s price for cremation rather than a higher future cremation cost, as cremation prices are expected to continue to rise.
Before prepaying cremation costs, read the agreement carefully to fully understand what services will be covered, whether you are entitled to a full or partial refund should you change your mind, and whether the agreement is portable. Portable agreements remain in effect should you move, and can be transferred to other facilities or funeral homes.
Cremation insurance is a small value life insurance policy designed to cover the cost of cremation and any funeral or memorial services at the time of death. Final expense insurance policies may be signed with a funeral home or crematory or with an insurance company.
You purchase an insurance policy for the anticipated amount of cremation and final expenses. You pay quite modest monthly amounts into the policy, and the policy is effective almost immediately. At death, the policy pays out immediately. Final expense companies pay the funeral home or crematory the amount of final expenses. If expenses are less than the insured amount, the balance is paid to the designated beneficiary. If final expenses exceed the insured amount, family members must cover any additional expense.
Planning ahead ensures you will have the services that best fit you, and offer you peace of mind knowing that final needs are managed. Most importantly, by planning ahead, you remove the burden of planning and payment from your loved ones.