Funeral Expense Explained

What is Final Expense?

What is Pre-Planning?

What is Pre-Funding?

What is an Irrevocable Trust?

What does Final Expense mean?

The word “final expense” is used in two contexts. The first context is a marketing expression for expenses which occur in the final stages of life. The expenses can include medical, attorney, real estate taxes, funeral, cemetery, and several other expenses which may be left after death to survivors of the deceased.

The second context can be the name of an insurance product which provides an insurance policy, typically to seniors, for the purpose of funding expenses such as funeral, cemetery, etc. Many insurance companies carry final expense products and they are often advertised on T.V.

Fortunately, there is a better way…

What is Pre-Planning?

The word Pre-planning is typically associated with a funeral plan made at a funeral home, where specific goods and services are selected at the funeral home.

An agreement is made between the funeral home and the consumer.

The funds are either placed with an insurance company in a specifically type of policy called a pre-need policy, or they are placed in a bank trust.

In both cases they can be placed in these vehicles either on revocable or irrevocable basis.

What is Pre-Funding?

Pre-funding is very similar to pre-planning, with one notable exception.

Pre-funding involves securing written instructions with a contract between the funeral home and the consumer, and paying before the time of need.

We can assist you with finding a qualified attorney who can help with pre-funding a funeral.

Contact us today for assistance about pre-funding your funeral.

Irrevocable Trust

A policy can be set aside on the irrevocable basis. A guarantee means that the funeral home has agreed the prices in the contract will not increase at the time of death for the survivors. Technically, the prices are not frozen, as the cost continues to rise for the funeral home, but the funeral home is going to offset the future cost of the funeral with the earned income gained in the policy. A policy can be set aside irrevocably for Medicaid planning purposes also.

Some funeral home owners, because of low interest rates, are simply setting funds aside on an revocable and not guaranteeing the contract. They will utilize funds available at the time of the death in the policy. Should there be an excess, they often return the excess, and if there is a shortfall, the funeral will collect the shortfall from the individual making the arrangements at the time of death.

Some exclusions do apply. Please contact us for details.

Questions? Let Us Know!

"You were right. if we had to come up with the money at this time in our lives, we would be financially stripped."

Dear Karen,

We were all very appreciative of the pre-funded funeral planning you arranged many years ago.

You were right…if we had to come up with the money at this time in our lives, we would be financially stripped.

Wishing you well, and thanks for everything.”

Ed, Paula and Jaime