Morbid Confession: I Prepaid My Own Funeral — Here’s How Much I Paid

06/05/2024

Sad couple walking through a cemetery

Talking about death is never a comfortable subject. But for Allen M., a retiree living in Los Angeles, planning and paying for his own funeral well in advance was a pragmatic decision he’s actually relieved to have made.

“I know it might sound, I don’t know, dark, but I wanted to get it over with and taken care of while I was still around,” Allen said. “This way, my kids won’t have to deal with the stress and unexpected costs after I’m gone.”

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Locking In Costs Ahead of Inflation

Allen ended up prepaying around $9,000 to a local funeral home for a basic cremation service package a few years ago. While $9,000 is still a significant sum, he feels he got a good value by locking in that price ahead of rising inflation.

“Funeral costs have been climbing every year, so who knows how much it could end up being 10 or 20 years from now, when I’ll need it?” Allen said. “I’d rather pay today’s price.”

Indeed, the median cost of a funeral with viewing and cremation has risen over 11% in just the last five years, to around $7,000 according to the latest data from the National Funeral Directors Association. For those wanting a traditional burial service, the median cost tops $9,000.

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Funding Your Prepaid Funeral

Of course, coming up with that lump sum funeral prepayment isn’t easy for everyone. There are a few main options to finance these prefunded “preneed” arrangements:

Life Insurance Policy

Some people set up a small whole life insurance policy just to cover their funeral costs. The policy’s death benefit is then assigned to a funeral provider, who gets paid first, before anything goes to your heirs.

Funeral Insurance

These pre-need insurance policies are designed specifically to cover funeral costs. You pay regular premiums until you die, and the funeral provider gets paid from the policy’s value.

Funeral Trust

With a revocable or irrevocable funeral trust, you make an upfront payment that gets invested and grows over time, until it’s needed to pay the funeral provider when you die.

Savings or Bank Account

The simplest way is paying the funeral home directly via a checking, savings or even CD account that is transferred to them after your death.

“For me, just taking $9,000 from my savings and giving it to the funeral home upfront was the easiest way,” said Allen. “I looked into the insurance options, too, but they all involved extra fees that I wanted to avoid.”

Advantages of Prepaying

Beyond locking in costs, prepaying for your funeral can provide additional advantages:

Your wishes are put into an enforceable contract that survivors must follow.
Funds are regulated and protected, depending on your state’s laws.
The burden of planning and paying doesn’t fall on grieving loved ones.

Of course, you’ll want to research local funeral homes, costs in your area and applicable regulations before prepaying. An estate attorney can also help ensure your plan will be properly carried out.

“It’s not fun to think about, but getting this … over with lifted a huge weight off my shoulders,” Allen said. “Now, my kids can just focus on celebrating my life whenever that time comes.”