What Are Your Options When It Comes to Financing a Funeral?

A funeral is a distressing time for people who have lost a loved one and, unfortunately, the cost of a funeral doesn’t make the situation any easier. “According to a funeral home comparison website, you can expect the average funeral cost for a traditional service to be between $8,000 and $10,000.”

There are, of course, other types of services that can help to cut costs, such as cremation. Even still, cremation services can be too expensive for some families, which begs the question: What are your options when it comes to financing a funeral? Here are a few considerations.

Family members and friends

One option for financing a funeral is to ask friends and family members for donations. Any amount can help out, and there are ways to cut costs on funeral services.

For example, you can consider cremation or hold the service at home. Families can even donate the body to science. Another alternative is to create a GoFundMe or Kickstarter campaign through which people can donate money. This can take some burden off of the family,  and, in a way, alleviate it to be taken care of by a larger group.

For some families, this is the only option, and the power of donations can go a long way.

Financing with the funeral home

While you will have to do your research and check with each individual place, financing through a funeral home or a lender that specializes in that type of loan service is an option, as is prepaying at a funeral home.

According to The Balance, a revocable trust specifically for the funeral is an option in which you pay for the funeral in installments and the funeral director deposits these installments into an account that will be used at the time of your passing.

Of course, prepaying at a funeral home comes with risk as the funeral home could go out of business, which is just one example of how this type of trust/investment could backfire.

Personal loan

If you or a family member has good credit, then one of the best financing options could be to apply for a personal loan. There are plenty of available options, and you could apply for a personal loan through a bank or credit union. A personal loan could allow you to receive the funds fast and, if you have a good credit history, at a good rate.

Depending on how much money you need for funeral services, you could even use payday loans online to cut the gap or even pay for the entire loan depending on the cost of the services. An offset calculator can help you figure out how much time and interest you can save on a loan if you decide to go this route.

Alternative option

While it’s not necessarily the same concept as the financing options listed above, setting up some form of life insurance could allow people to make reasonable payments for a policy. The money will then go to the beneficiary after the death which can be used for funeral service costs.

While everyone’s situation is different and not everyone can afford a life insurance policy, this is arguably the best option as life insurance premiums tend to be low and will typically cover all costs. According to NerdWallet, “Life insurance is a contract between you and a life insurance company. You agree to pay for the policy on a regular basis, and the insurer agrees to pay a sum of money to your beneficiaries if you die.”

There are many different options available when it comes to financing a funeral, with the options above being some of the more common routes.

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