Is a Prepaid Funeral Home Plan a Good idea?

Prepaid Funeral Home Plan

Everyone passes.  We all want to think we will live forever and since our heads are attached to our bodies and have been doing non-stop thinking (sometimes worrying) for all of these years, it’s hard to believe that this function could eventually be permanently turned off. But eventually we have to start thinking about it. You may considering getting a Prepaid Funeral Home Plan.

But it happens …

Even our greatest leaders like George Washington, Abe Lincoln and John F. Kennedy passed away.  There brains thought amazing thoughts and then one day, it was over.

It’s just the reality, we all pass on.  Our thoughts end.  Then your loved ones clean up and the next generation moves on.

And as folks get older the thoughts of death creep in more and more.  The realization that it’s not 1966 anymore where a complete funeral with many guests could be done for under $1,000 is in the back of some senior’s minds.  They know … the financial ramifications of a funeral could be ugly for their beloved ones.

So how do you prepare?  You could just take $15,000 and put it in untouchable account, but even for those that could afford it, how many would actually do it?

Life just doesn’t work that way.  We are a monthly payment society and as a results most folks who want coverage do so either with a prepaid funeral plan or a Final Expense Policy.

But which one to pick?  A prepaid funeral plan or Final Expense Burial Insurance? It’s so overwhelming, many just put it off and never get it done.

But the choice is quite simple.  And here is the kicker, the sooner you take action and get it done properly, the LESS it will cost.  This is a classic example of putting something off that could be done today costing you significantly more money.

But let’s say you want to just go to your local funeral home and cut a deal.  Here are some things that can go wrong and then a few things that can go right.

  1. Your funeral home could go bankrupt (think it can’t happen … WRONG, it can and does happen)
  2. You have ZERO flexibility with a prepaid funeral plan.  Things can change in a few years, let alone 15 or 20 years.  While you might like the idea of knowing exactly where you are HOPEFULLY going to be buried, what happens if you have a major life change and that just doesn’t work out for you anymore?
  3. The FTC has issued alerts that there are SOME states that do not offer you protection from these plans.  There is a lot of fine print in the funeral home contracts.  Bring your best reading glasses before signing.
  4. Many times there are ZERO refunds.  Change you mind, lose your money.
  5. Even folks that work at funeral homes will tell you to spend more time planning and less time paying for these pre-paid agreements.
  6. Costs can rise … Don’t think they don’t have those costs figured into their contracts

Now what is the good?

Some folks like the idea of “knowing” where they will be buried.  Not that a Final Expense insurance product wouldn’t offer the same benefits (is the funeral home really going to turn down your loved ones money courtesy of your final expense coverage) with money left over, but some folks just want a contract written by the people that are going to bury them.

It’s a little bit morbid … but some folks think that way …

Bankrupt Funeral Directors Impossible?

Guess again if you think a Funeral Director can’t become insolvent or just be a crook and take your money and run.  You’re paying someone who is in a mostly unregulated industry.  One could argue, paying your neighbor a flat fee each month until you die, would get you to the same place.  Maybe they could bury your monthly payments in their backyard.

After all, you next door neighbor could be a funeral director.

So, it’s nothing more than a local business you are trusting to be there for your family when you pass.  True, if it was the 1970’s and business was done on a handshake and families passed down the family work from one generation to the next, maybe it would be a semi-safe bet then.

But it’s 2020 and as we all know ANYTHING goes.

There was a famous case back in 2016 where a jury was forced to award over $400 million in damages to approximately 97,500 families who were defrauded by a prepaid funeral company.

The companies name: National Prearranged Services

Guess how much of that $400 million award was still there to be rewarded back to those near 100,000 folks.  We all know how the court system works.  You win a verdict and the lawyers get paid first and you are lucky to get pennies by the time all the hands are done taking from the pot.

And meanwhile, a lot of these judgements come against companies with EMPTY bank accounts.  All the money has been sent overseas or just spent.

You really want to risk your burial with a single individual, even if he dresses in black, talks softly and makes you think he or she is the most trustworthy person on earth? 

It’s impossible to Move most PrePaid Funeral Home Plans

We know, your getting up there in years and you think there is never anything that can happen that would allow you to move to a better place, but things happen.

True the state of Michigan forces all prepaid funeral home plans to be transferable by the client, but then there are still the other 49 states that will tell you tough luck.  Money lost.

What if one of your kids or Grandkids wins the lottery, or maybe just hits it big in business and welcomes you into their home, but they live in a different state.

We know, your kids are nice, but that can’t happen to them, and even if it did they probably wouldn’t want me, but who really knows.

This writers mother lived in Middletwon, CT her entire life, but recently when my Dad (and her husband) died, she had the pleasure of moving in with us in our beautiful home here in Scottsdale, Arizona.

My wife treated her as if she was her own mother.

If she had done a prepaid funeral home plan in Connecticut, it would have been nothing more than a piece of expired paper she had paid tens of thousands of dollars for.

Wrong, wrong … very wrong. 

You Might Not Believe This, But the Funeral Home can Become your Beneficiary

For folks who have Final Expense life insurance, your loved ones become the beneficiary of any plans you might have.

When you get entangled with a funeral home, expect them to ask to be the beneficiary of any plans you might have.  Now granted, this does not always happen, but funeral homes are dealing with the elderly and they seem very trustworthy since in fact you are trusting your body in the future to the,

You would be surprised what they can ask from their clients.  The loved ones might get a big surprise when the funeral director gets all, and the kids, they get none.

Don’t try and make needed changes to a prepaid Funeral Plan

If you like straight jackets, you will love these Funeral Directors and the plans they offer because you are in a fixed state with little if any ability to make changes.  Imagine paying a Funeral Home for the rest of your life and then if you decide you want to make alterations to your plan, you can’t.  Now granted some contracts do allow you to make small changes, but do you really want to deal with all of their red tape?

Refund with the Funeral Home?  You Can Forget About That One …

Regulation on Funeral plans is sketchy at best and if you ever need a refund, you better expect to get a minimal one if any.

Imagine putting $10,000 into a prepaid funeral plan and then your own plans change and then you can only get half your money back if any?  That’s not planning, that’s a total waste.  The true key is to get the FULL benefit after you opt in, which is why a Final Expense Insurance plan from a 100 year old plus carrier like Royal Neighbors is a far better option for most.

You pay in … Your loved ones get the benefit when you pass … and then they are free to cut the best deal for your family with whatever cremation or burial facility they decide on.

Keeping your wishes alive, even after you have passed.

Gary P. Cubeta
(Serving Americans In All 50 States)