When someone we love passes, one of the next steps is finding the funds for a funeral service to honor their memory and celebrate their life. However, if you’re not in the best financial situation, it may be difficult to plan the ceremony your loved one deserves. Luckily, in the U.S., most funeral homes allow the option to pay for funeral services in installments to help lower the overall price.
Prepaid Funeral Plan
A prepaid funeral plan allows individuals to make small monthly installments to pay for their funeral in advance. With this funeral payment plan, you can be confident you’ll have the funeral you want with limited financial stress for your loved ones.
Funeral trusts are another payment option for individuals who have the funds and wish to plan ahead. The rules and laws surrounding a funeral trust vary between states. For example, some states require individuals to pay installments for a percentage of the funeral expenses, while others require you to pay for the entire service. There are three types of funeral trusts:
- Irrevocable trust: An individual cannot change or dissolve an irrevocable trust. As soon as you put money into this type of trust, you no longer have access to it except to reassign the trust to a different funeral home, if necessary.
- Revocable trust: With a revocable trust, you remain in control of your assets and can cash out the funds or cancel the trust at any time. However, there may be some stipulations and penalties involved in doing so.
- Totten trust: A Totten trust is an account you set up at your local bank, and you’re in control of any money you put into this account. You can take out as much or as little money as you need without the risk of a penalty. In the event of the policy holder’s death, the funds pass to a named beneficiary.
Life insurance plans can help fund and pay for a funeral through installment payments or deducting a certain amount from your paycheck. Depending on your life insurance plan, you may receive the funds to pay for the entire funeral. However, many insurance companies take weeks or months to disperse funds after an individual passes, which may require an out-of-pocket payment.
There are two main types of life insurance policies available:
- Term life insurance: The intention of term life insurance is to give the beneficiaries a payment in the amount of your deceased loved one’s income. Your loved one will pay for this form of life insurance monthly or throughout the year to replace what they typically make as a wage to pay for a funeral or other expenses.
- Whole life insurance: Whole life insurance covers the individual throughout their life and will pay the beneficiaries a benefit after the policyholder passes to use towards the funeral cost.
Learn More About Payment Plan Options at Joseph A. Lucchese Funeral Home
At Joseph A. Lucchese Funeral Home, we want to help you celebrate the life of your loved ones without financial stress. We offer various pricing and financing options to help you pay for funeral services. Contact us today to learn more about our services.