What is guaranteed in a pre-paid funeral plan?

The services guaranteed in a pre-paid funeral plan are those the funeral home writes into a pre-need insurance policy and will be paid for upon death for no additional charge.

A funeral home will sell pre-need insurance policies in order to organize and plan a funeral before the death occurs. In order to do this they write an insurance policy that will cover future expenses but give you today’s prices. For example, if you wanted a full service funeral with a silver casket and it costs $10,000 dollars in 2014 and a funeral home writes a pre-need insurance policy for that amount, when the death occurs in 2020 the funeral cost for the full service funeral with a silver casket could now be $15,000. You would not pay anymore money for that exact funeral. The funeral home is hoping that the insurance policy will gain enough interest that it grows to cover 2020’s increase in price.

The funeral home can only guarantee the services that they offer. They can not guarantee services of another business such as flower shop, monument shop (for headstones) or the price of Death Certificates. Sales Tax is also something that cannot be guaranteed. They can however write into the policy an allowance that can help pay for these types of items.

Many people will pre-pay for a few things like a burial plot and a casket and think they are done. But when the death occurs, their family often wants to have a service and a viewing and other merchandise like programs and a register book, etc. If these items are not written into the policy, they will not be guaranteed and additional charges may be added that might exceed the amount in the policy. So make sure you plan for every possibility because if there is money left over in a policy, the family of the deceased gets any money not used returned to them.