Pre-arranging a funeral: How to plan your own funeral

Thinking about your own funeral can feel overwhelming and uncomfortable, but planning ahead can help ease the financial and emotional burden on your loved ones during a difficult time. Taking a proactive approach to your final arrangements allows you to clearly outline your final wishes, prepare financially, and explore how a life insurance claim could help cover costs. Here is a helpful guide to pre-planning a funeral and making thoughtful decisions about the future.

Pre-planning a funeral vs. prepaying funeral expenses

When pre-arranging a funeral, there are commonly two approaches: pre-planning and prepaying. Pre-planning a funeral involves making decisions about final arrangements in advance, while prepaying funeral expenses means setting aside money or purchasing services to help cover future costs. Understanding the difference can help an individual choose the best option for their personal wishes and financial situation.

Pre-planning your funeral

Pre-planning a funeral can be a practical approach to making final arrangements ahead of time. A person may wish to clearly outline their funeral preferences, reduce uncertainty, and ease the decision-making process for family members during an emotional time. Decisions to make about your funeral may include:

• Handling of remains: Traditional burial, cremation, mausoleum, or green burial
• Type of service: Funeral, memorial service, celebration of life, or other gathering
• Funeral home or service venue
• Personal details: Music, flowers, headstone, obituary, pallbearers, or specific readings
• Person in charge: A trusted family member or loved one to oversee arrangements
• Payment and contract options: Prepaid funeral plans, life insurance benefits, burial insurance or other options

Pre-planning a funeral helps ensure that final wishes are clearly documented and carried out as intended.

Prepaying funeral expenses

As part of pre-arranging a funeral, a person may choose to prepay funeral expenses by setting aside funds or purchasing services in advance to cover related costs. Many funeral homes offer prepaid contracts that allow individuals to make either a lump-sum payment or pay in installments toward future funeral services. This can help lock in pricing and spread out payments over time, however, it’s important to be aware of possible interest charge, administrative fees, and restrictions on refunds or changes. Other options for prepaying funeral expenses include:

• Savings accounts: Some individuals choose to set aside funds in a dedicated savings or investment account to cover final expenses. While this offers flexibility and control, it requires discipline and may not guarantee the funds are used as intended without proper planning.
• Final expense insurance: Also known as burial insurance, this type of whole life insurance is specially designed to cover end-of-life costs such as funeral, burial, or cremation costs.
• Life insurance: A traditional life insurance policy can provide a larger death benefit that beneficiaries can use toward funeral expenses and other financial needs.

How life insurance can help with funeral expenses

Purchasing life insurance is a great way to financially protect loved ones and provide the funds needed to cover final expenses. In many cases, the proceeds from a life insurance claim can help pay funeral costs and prevent families from draining savings, going into debt, or relying on crowdfunding to cover these unexpected expenses.

Does life insurance cover funeral costs?

Life insurance can help cover funeral costs if the policy’s beneficiary chooses to use the death benefit for that purpose. Whether funeral expenses are fully covered depends on the type of coverage, payout amount, and specific policy terms. Many final expense policies are designed specifically for funeral and end-of-life costs, while other life insurance plans usually offer higher coverage amounts that can also be used for a variety of other financial needs.

What is the difference between life insurance and burial insurance?

Life insurance provides a death benefit that can be used for various expenses, including income replacement, debts, and funeral costs. Burial insurance is a type of final expense insurance that usually offers smaller coverage amounts and is specifically designed to cover funeral and related end-of-life expenses. Key differences between life insurance and burial insurance include:

• Policy type: Burial insurance is usually a type of whole life insurance, while traditional life insurance can come in different forms, either term or permanent. 
• Coverage amounts: Life insurance has a large range of coverage amounts depending on a person’s needs. Burial insurance is often a smaller coverage amount meant to cover only final expenses.
• Premiums: Life insurance premiums vary based on coverage amount, age, and health of the insured, while burial insurance often has fixed, affordable premiums, typically suitable for older adults.
• Underwriting: Burial insurance typically features simplified underwriting or no medical exam, making it easier to qualify. Some life insurance policies require medical exams or health questions to apply, while other policies offer simplified underwriting options with fewer requirements.
• Purpose: Burial insurance is specifically designed to cover funeral and end-of-life expenses. For other types of coverage, a life insurance claim can be used for a range of financial needs, including funeral costs, paying off debt, covering everyday living expenses, saving for college, and more.

Helping your loved ones navigate a life insurance claim

Losing a loved one is never easy, and dealing with grief can make even simple tasks feel overwhelming. Preparing your loved ones to file a life insurance claim can help ease some of the stress during an already difficult time. Start by sharing details about the policy, including name of the insurance company, the names of the beneficiaries, and where policy documents are stored. When the time comes, your loved ones will typically need the policy number, contact information for the insurer, a certified death certificate, and valid ID. Keeping this information organized and accessible helps ensure the claim process goes as smoothly as possible.

Contact Midland National to learn more about life insurance for funeral expenses

Midland National supports your long-term goals with a range of annuity and life insurance products, distributed through financial professionals.

We can help you plan with confidence and find solutions that help provide financial protection, peace of mind, and financial security for the future, including options designed to help cover funeral expenses and ease the financial burden on your loved ones.

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