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Prefunding Options
There are two basic types of prepayment options available. They are the cash funded or insurance funded options. In each case it is important to first identify the cost of the funeral service desired. Many funeral homes will allow the purchaser to prepay not only the funeral home's charges but also any third party expenses such as the cemetery plot(s), opening and closing, flowers, newspaper notices, and etcetera. Some will even include the advance purchase of a monument.
Cash Opinion:
When paying by cash the purchaser may choose to pay a single lump sum payment or make regular installments over a fixed period. Generally the price of the funeral service is guaranteed once it has been in full. Some exceptions do apply, particularly if a significant portion is paid up front and, the payment schedule for the remainder does not exceed a reasonable period, say 12 to 18 months.
Insurance Option:
With funeral insurance an individual may purchase a life insurance policy, the proceeds of which would be used to pay for the funeral. The funeral home would receive an assignment of the future death benefit or, in some cases, may be named as beneficiary.
There are now funeral insurance products on the market that if assigned by the purchaser to the funeral home, the funeral home will guarantee the cost of the funeral against the policy.
Many different kinds of policies are available in this province. Funeral insurance plans, for the most part, are provided by specialty firms or insurance brokers licensed to sell these products. Some funeral homes actually endorse selected products.
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