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Five Ways to Cover Funeral Costs in Advance

by Legacy Staff

Banks, insurance providers, and funeral homes all offer solutions for pre-planning funeral expenses.

The best way to save money on a funeral? Plan ahead. (Find planning help here.) Including funeral expenses in your regular financial plan can save your family money and spare them the added stress of having to plan and finance your final send-off.

“These are tough conversations for many families, but important ones,” says Patrick O’Brien, CEO of Executor.org. He suggests giving family members a heads-up that you want to begin this discussion—and letting them know right up front that there’s no crisis prompting it, just a desire to tend to important family responsibilities.


There are many different approaches to setting aside money in advance to cover funeral and related expenses. Each solution offers its own pros and cons. Some of the most common include:

A simple joint bank account that specifies rights of survivorship. If you can trust a family member to refrain from touching a joint bank account until it’s needed, this may be the easiest approach. It will offer little interest but is quickly accessible without red tape when the time comes.

A payable-on-death bank savings account. This kind of account can only be accessed by you while you’re alive, and then by a designated beneficiary upon your death. They’ll need to present your death certificate first, which isn’t always available immediately.

Funeral home prepayment. This option, if you can afford it, allows you to make all the decisions yourself, so your grieving loved ones won’t have to. Depending on the details, it may or may not tie you to a specific funeral home.

Burial insurance. A burial insurance plan sold by a funeral home will be payable for funeral costs at that home immediately. Depending on how long you have that insurance, it’s possible that, over time, you may pay more in premiums than the actual funeral expenses.

Whole life insurance. A whole life insurance plan sold by an insurance company is fully portable if you move, though it may take 30 days for the company to verify and pay your claim.

As you explore these options, both with specific financial providers and using online reference resources such as the Federal Trade Commission, consider your specific situation. How much can you afford to set aside? Is your family good at cooperating to manage money decisions in a time of stress?

Whatever approach you ultimately choose, O’Brien says, make sure to let your family know. They’ll need to know how to access the documents, including contact information for any financial providers and passwords to online accounts.

It’s worth remembering that there are likely to be additional expenses to account for on top of the funeral home costs. Is the burial plot included? The headstone? Be sure to request and review an itemized list of all the funeral/burial services you’re paying for.

“Depending on your family situation, you may want to consider trust estate planning through an estate attorney,” O’Brien says. “A quality financial adviser who understands your investment time frame can be a great resource in making sure you maximize the growth of your assets, and that they are available without penalty when you need them. If your goal is simply to set aside enough money to pay for a funeral and related costs, ask trusted local professionals for referrals to help you find highly reputable funeral homes to discuss pre-planning options. Be a smart consumer and get several quotes.”


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