Here is the final part of our discussion on Pre-Arranging your or your loved ones death.
Financing Funerals
There are a number of options for financing funerals, and when you pre-plan your funeral, you can take advantage of the best program for you. Options include preneed insurance policies, bank or funeral trusts, life insurance, and annuities. But which one's right for you?
How to Pay for a Funeral
Today, the cost of dying is at an all-time high. Average cost of a funeral is approximately $6,000. But there are ways to beat the high costs. How to Pay for a Funeral
I'm not afraid of death. I just don't want to be there when it happens-Woody Allen
Like it or not, death will visit even those who don't want to be there when it happens. And like it or not, death is a costly affair. To beat the high cost of dying, more people are starting to consider preplanning and prepaying.
It is estimated that more than a million people will consider making prearrangements. It takes away the guesswork.
When you prearrange, you have control of the decisions relating to your death--the disposition of your body, the funeral or memorial services, what you want your obituary to say about your life, and a reasonable budget which will ease the financial burden for your surviving members.
If you wait until the last minute, it's too stressful, for you're at the worst day of your life to make decisions. But preplanning is simply making arrangements ahead of time. Preneed means prepaying, and preneed programs are actively sold by mail, by telephone and in homes.
In fact, billions are invested in all kinds of prearrangement contracts.
Funerals as a Consumer Product
Funerals rank among the most expensive purchases many consumers will ever make. Here are some things to think about. Funerals rank among the most expensive purchases many consumers will ever make. A traditional funeral, including a casket and vault, costs about $6,000, although extras like flowers, obituary notices, acknowledgment cards, or limousines can add thousands of dollars to the bottom line.
Many funerals run well over $10,000.
Yet even if you're the kind of person who might haggle with a dozen dealers to get the best price on a new car, you're likely to feel uncomfortable comparing prices or negotiating over the details and cost of a funeral, preneed or at need.
Compounding this discomfort is the fact that some people "overspend" on a funeral or burial because they think of it as a reflection of their feelings for the deceased.
Funeral Costs
Funeral costs include a basic services fee for the funeral director and staff, charges for other services and merchandise, and cash advances. Funeral costs include:
1. Basic services fee for the funeral director and staff
The Funeral Rule allows funeral providers to charge a basic services fee that customers cannot decline to pay. The basic services fee includes services that are common to all funerals, regardless of the specific arrangement. These include funeral planning, securing the necessary permits and copies of death certificates, preparing the notices, sheltering the remains, and coordinating the arrangements with the cemetery, crematory or other third parties. The fee does not include charges for optional services or merchandise.
2. Charges for other services and merchandise
These are costs for optional goods and services such as transporting the remains; embalming and other preparation; use of the funeral home for the viewing, ceremony or memorial service; use of equipment and staff for a graveside service; use of a hearse or limousine; a casket, outer burial container or alternate container; and cremation or interment.
3. Cash advances
These are fees charged by the funeral home for goods and services it buys from outside vendors on your behalf, including flowers, obituary notices, pallbearers, officiating clergy, and organists and soloists. Some funeral providers charge you their cost for the items they buy on your behalf. Others add a service fee to their cost. The Funeral Rule requires those who charge an extra fee to disclose that fact in writing, although it doesn't require them to specify the amount of their markup. The Rule also requires funeral providers to tell you if there are refunds, discounts, or rebates from the supplier on any cash advance item.
Calculating Funeral Costs
The funeral provider must give you an itemized statement of the total cost of the funeral goods and services you have selected when you are making the arrangements. The funeral provider must give you an itemized statement of the total cost of the funeral goods and services you have selected when you are making the arrangements. If the funeral provider doesn't know the cost of the cash advance items at the time, he or she is required to give you a written "good faith estimate."
This statement also must disclose any legal, cemetery, or crematory requirements regarding specific funeral goods or services.
The Funeral Rule does not require any specific format for this information. Funeral providers may include it in any document they give you at the end of your discussion about funeral arrangements.
The Federal Trade Commission Funeral Rule and You
from the Federal Trade Commission
Most funeral providers are professionals who strive to serve their clients' needs and best interests. But some aren't. They may take advantage of their clients through inflated prices, overcharges, double charges, or unnecessary services. Fortunately, there's a federal law that makes it easier for you to choose only those goods and services you want or need and to pay only for those you select, whether you are making arrangements preneed or at need.
The Funeral Rule, enforced by the Federal Trade Commission, requires funeral directors to give you itemized prices in person and, if you ask, over the phone. The Rule also requires funeral directors to give you other information about their goods and services.
For example, if you ask about funeral arrangements in person, the funeral home must give you a written price list to keep that shows the goods and services the home offers. If you want to buy a casket or outer burial container, the funeral provider must show you descriptions of the available selections and the prices before actually showing you the caskets.
Many funeral providers offer various "packages" of commonly selected goods and services that make up a funeral. But when you arrange for a funeral, you have the right to buy individual goods and services. That is, you do not have to accept a package that may include items you do not want.
According to the Funeral Rule:
• you have the right to choose the funeral goods and services you want (with some exceptions).
• the funeral provider must state this right in writing on the general price list.
• if state or local law requires you to buy any particular item, the funeral provider must disclose it on the price list, with a reference to the specific law.
• the funeral provider may not refuse, or charge a fee, to handle a casket you bought elsewhere.
• a funeral provider that offers cremations must make alternative containers available.
Preneed Funeral Planning
No one likes to think about death, let alone plan for it. But, to help relieve their families of some of these decisions, an increasing number of people are planning their own funerals.
Financing a Funeral or Memorial Service
Inflation will increase these costs over time; in fact, average funeral prices have tripled in the last 15 years. Find out how to protect your investment.
Why Pre-Fund a Funeral?
"Cost of living increases--my income can't keep up; now my funeral cost will remain the same."
Financing a Funeral or Memorial Service
Cemetery charges and the cost of a monument or marker are extra charges, over and above the cost of the funeral. Inflation will increase these costs over time; in fact, average funeral prices have tripled in the last 15 years.
A funeral is an essential expenditure, and a little planning will eliminate the uncertainty of costs and payment. If you don't plan for funeral expenses, you run the risk of your family having to ask friends and relatives to share an unexpected financial burden, which can put everyone in an embarrassing and uncomfortable position. And if you borrow money, it has to be repaid.
