Benefits of Funeral Preplanning and Prefunding

In recent years, more and more people have opted to make funeral or cremation arrangements prior to their death. These arrangements are commonly referred to as funeral preplanning or prearranging.

Many people find that funeral preplanning gives them peace of mind knowing that their wishes will be respected and that the family has fewer burdens from making decisions about funeral arrangements during a time of grief.

Others find that by prefunding their funeral or cremation expenses, any additional life insurance they already have purchased may be used for its original purpose and not for funeral expenses.

There are several benefits to funding your funeral prearrangement in advance.

The funeral services may be carried out at little or no additional cost to your family.
Funds may be immediately available to pay funeral costs, with no waiting period due to probate or other delays.
May prevent other life insurance policies from being depleted at the time of a loved one’s death.
Allows you to consider cost-effective options at a time when you are better prepared to make sound, fiscally responsible decisions.
There may be flexible payment options to meet your needs.
In some states, prearranged funeral contracts may not be counted as assets for Medicaid spend-down purposes.
The death benefit of a preneed life insurance policy grows over time to help offset inflation and that growth may not be taxable to you.
A preneed life insurance policy is portable; therefore, if you move to another area, the insurance may be used to fund a new prearranged funeral contract with the funeral firm of your choice.