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The COVID-19 pandemic underscored the fragile nature of life. Sadly, it also shed light on the financial toll of death. According to the National Funeral Directors Association, the median cost of an adult funeral with viewing and burial stood at $7,640 in 2019.
Fortunately, you can compare funeral expenses among various providers to select the best, most cost-effective option. In some cases, you might qualify for federal aid to pay for a funeral. And if you're planning ahead, you might consider taking out a life insurance policy or setting up a prepayment plan to help cover the costs of your own funeral.
The following tips can help you pay for a funeral.
How to Pay for a Funeral
You may not be emotionally equipped to focus on finances when you're planning a funeral for a loved one or friend, but you can take comfort in the fact that there are a number of ways to keep costs in check. Here are some of those ways.
Compare Costs at Funeral Homes
You might be able to save several thousand dollars if you shop around among local funeral homes, the Funeral Consumers Alliance says. The Federal Trade Commission (FTC) recommends checking prices at two or more funeral homes, which you can do online or by calling the funeral homes you're considering. Funeralocity.com lets you compare pricing at funeral homes and cremation providers.
Funeral providers are required by law to provide you a list of prices for goods and services. If the company doesn't know precisely how much a certain item will cost, they must give you a written "good-faith estimate." The FTC notes that you may be able to save money by supplying a casket or urn on your own rather than buying it from a funeral home.
Make Economical Choices
Options to help reduce the cost of a funeral include:
- Direct cremation: This involves cremation without embalming, viewing or visitation. The price for this service could be as low as $800.
- Direct burial: This approach eliminates the need for embalming, viewing or visitation and could save several thousands of dollars.
- Home funeral: In all but nine states, you can carry out the entire funeral at home. This option involves minimal costs.
Work Out a Payment Plan
Typically, a funeral home wants all goods and services to be paid upfront. However, you may be able to negotiate a plan to pay off part of the bill over time. Beware of taking out a loan or using a credit card to cover funeral expenses, as this may add to your debt.
Save Money in Advance
If you want to spare your family the cost of arranging your funeral, consider setting aside even a small amount each month toward expenses for your own funeral.
Open a Payable-Upon-Death Account
A payable-upon-death account at a bank ensures the money you save for your funeral will be released right after your death to whomever you designate as your beneficiaries. You can take your money out of one of these FDIC-insured accounts at any time.
Purchase a Life Insurance Policy
A life insurance policy pays a lump-sum amount to your beneficiaries after you die. At least some of this money could be spent on your funeral.
Establish a Prepayment Plan
Under a prepayment plan, the funeral home deposits your money into an interest-bearing account or insurance policy. Following your death, the money goes directly to the funeral home. Generally, the Funeral Consumers Alliance recommends against prepaying for a funeral. In part, that's because your survivors may be unaware of the prepayment plan and thus unable to take advantage of it, and because some states lack strict laws governing these plans.
COVID-19 Funeral Assistance
In some cases, you may qualify for federal aid to cover funeral expenses arising from a death related to COVID-19.
In April 2021, the Federal Emergency Management Agency (FEMA) started providing financial assistance for funeral expenses incurred after January 20, 2020, for the death of a loved one attributed to COVID-19. The money is aimed at covering expenses associated with funeral services, cremation and burial. FEMA restricts the assistance to $9,500 per funeral and $35,500 per application. To apply for financial assistance, call FEMA at 844-684-6333.
What Happens if You Can't Afford a Funeral?
If you can't afford a burial or cremation, don't despair. There may be a number of alternatives available to you. These include:
- Veterans' benefits: If a loved one was a U.S. military veteran, the federal government might pick up the tab for their gravesite, headstone, vault and interment at a national cemetery. Survivors would be responsible for the remaining expenses.
- Help from an employer: Some businesses offer survivor benefits to loved ones of deceased employees, as do some labor unions. These benefits could cover some or even all of the funeral expenses.
- Government aid: Some local or state agencies may chip in money to pay some of the funeral costs for an indigent person, or for somebody who received Medicaid, Social Security Disability or Supplemental Security Income benefits.
- Victims' assistance: Some states offer financial relief for survivors who are putting accident or homicide victims to rest.
- Charitable contributions: If you find yourself unable to come up with money for a loved one's funeral, consider approaching your church, a nonprofit or another local organization for help. You also might create a fundraising campaign on a crowdfunding platform like GoFundMe.
- Donation of the body: Donating a body to a local medical school will eliminate the cost of burial.
The Bottom Line
Burying or cremating a loved one can be costly, and difficult to consider when you are also dealing with the emotional toll of your loss. Looking into cost-effective options can help ease your financial burden. Setting aside savings or insurance for your own future funeral expenses can save your loved ones from some of the financial strain at a difficult time.