Payment Options
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Payment Options by Dr. R.E. Markin
Funeral Help Program
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Payment Options- Payment Options

Funerals are, by and large, expensive. We have allowed the industry to goad us into frills and flourishes which contribute little, yet cost much. Having to finance one suddenly can be a burden that many, perhaps most, families are unprepared to face. Not coincidently, there is often a windfall of money at this time, in the form of life insurance proceeds, so families tend to consider that money 'going away' funds. The industry preys on this feeling that, since it was money the deceased arranged for to help 'put him away', every last dime should be spent on that event!

The fact is, life insurance was never intended to be sucked up on a fancy funeral, but rather as a hedge against disaster for the survivors. Now that funerals routinely run up to, and over, $10,000 ... the funeral itself can BE the disaster! Hence this section, so let's look at the options for paying funeral expenses.

Cash/Credit Cards

Yes, there are some folks who can simply stroke a check for funeral expenses. Oddly enough, it isn't the idle rich who get nailed with expensive funerals, as they are more inclined to have simple ceremonies following a 'family-only' direct burial or cremation. Look to ritzy Marin County, California for instance, where wealth is a foregone conclusion, and you'll see that over 70% elect cremation. The big-dollar funeral is a blue-collar phenomenon, which is to say ... most of us. Sociologists would have a field day explaining why this is, but survey after survey has proven it true. So, for most of us, ready cash is simply not an option.

Credit cards, however, MAY be an option and even a good one at times. Virtually all funeral homes now accept credit cards, and if you've checked your mail lately you know credit card companies are hungry for business. And, with some of the competitive rates available today, you might well want to put funeral costs on a credit card -- say at its 'introductory rate' of 0%-9%, rather than leave a balance on the books at the funeral home (which charges 12% or more APR on any outstanding balance) while waiting for the insurance proceeds to arrive. This is also a good way to keep your insurance benefits out of the hands of the death industry.

Insurance Death Benefits - Assignments

This is a common way of handling expenses, and a tricky one if you don't understand how it works. What happens is, you bring the deceased's insurance policy with you, the funeral director calls the company to make certain it is still in force and will pay a benefit, then you (the beneficiary named in the policy) sign forms granting the funeral director all or a portion of those benefits. This is where it can get tricky, you should never sign away any more than the good-faith estimate provided by the funeral . Funeral directors sometimes want to take control of the entire death benefit, then keep their portion and return the rest ... if any ... to you.

You may encounter this ploy, particularly if you let the funeral home handle the cemetery fees as well. Say you get a bill for $8,600 and the itemized bill for the funeral portion is only $4750, what do you know about the rest of the charges? Nothing! Since cemeteries are not regulated by federal law, or required to furnish detailed lists of charges , the funeral director can simply list Cemetery Costs -- $3,850 and leave it to you to ferret out what it was all for. If this sounds like an invitation to abuse and over-charging congratulations, you're learning. Handle the cemetery yourself, preferably in advance, and with the minimum allowable outer container.

Pre-Payment Plans

These sound like a good idea, but rarely are the way they are operated by the funeral industry. They hype the peace-of-mind that comes from knowing your family will not have to shoulder a financial burden when you die, yet very rarely follow through on that. It is a rare pre-paid funeral that includes all costs, with the family typically having to pony-up an additional $1,000, $2,000, or more. It is also rare for a payment plan offered by a funeral home to be anything more than reselling an existing product with an extra layer of profit thrown in. For your best value, get your insurance from an insurance company and cut out the 'middle man'.

A built-in problem with all funeral expenses, and what drives prices into the ludicrous range, is what is known as 'up-selling', and this is due to funeral sales people (laughingly referred to as 'Grief Counselors' in the trade though they cause more grief than they help with) being paid commissions on their sales. It is not uncommon for these sales folks, and cemetery sales personnel as well, to call up their elderly customers who have pre-paid for goods and services and, under the ruse of updating their computers or whatever, get them to come by to verify information. Then they are hit with a hard-sell to upgrade their goods and services. One sales person told us he closes over 40% of these calls.

An extreme example of up-selling occurred in Florida a while back and made the news again recently, wherein an SCI-owned funeral home had up-sold an elderly lady funeral goods and services totaling $136,000! The victim of this is still alive, living in a nursing home, and largely oblivious to what had happened to her. The family sued, SCI settled out of court for an undisclosed amount, and hopefully folks who read the Associated Press account are a bit wiser.

Now on to the various pre-need/pre-purchase plans. The Affordable Funeral goes into detail on these plans, with a break-down of the common ploys, half-truths, and outright lies associated with them, and you are well advised to read up on any plan before you buy, and for certain if you have already bought one . . . to learn what it is you actually purchased. For our purposes here, we'll look at the typical plans offered. Add to a notebook or create a new notebook