End of Life Plan
3 Most Common Ways to Preplan a Funeral
Most financial professionals and families tend to overlook one of the greatest gifts you could ever give your family, which is properly preparing them one of the most difficult experiences of their life.
Arguably the biggest challenge for those responsible for taking care of your funeral arrangements is that they are forced to make extremely important decisions, including costly financial choices, within a small time frame of approximately 48 hours after your death. Of course, nobody should expect to fully alleviate the emotional and financial challenges, but you can help them tremendously by creating a sound end of life plan.
Clearly one of the best gifts you can give your loved ones is to preplanning a funeral and also prepaying your funeral expenses. In fact, most financial professionals would agree that creating an End of Life Plan is a considered sound financial advice because this helps to complete your “big picture” financial plan.
The first way to preplan a funeral is by solely documenting the majority of details in writing. This written preplan can be accomplished by using what is commonly referred to as a Family Record Guide. Although documenting your final plans and preferences in writing is the most basic type of preplan, this is a wonderful accomplishment because you are still relieving your loved ones from the burden of many difficult financial and emotional decisions during a time of great loss.
A Pre Need Plan is widely recognized as the most complete way to preplan a funeral. The reason a Pre Need Plan is often referred to as an “all-inclusive” end of life plan is because it allows you to:
- Choose your final plans and preferences, including any preferred funeral merchandise and services
- Simultaneously purchase an funeral insurance policy to ensure the appropriate amount of funds are made available to cover the total funeral costs of the complete end of life plan you’ve chosen
Similar to a Pre Need Plan, another way to prepay funeral expenses can be accomplished through purchasing a funeral insurance or burial insurance policy. This insurance policy proceeds are used to cover the final expenses of your end of life plans, preferences, merchandise and services.
However, a Final Expense Plan is typically used because it can cover more than just the costs related to your funeral services. In other words, final expense insurance can be designed to cover your funeral expenses, but also leave behind additional monies to cover expenses such as the settlement of your estate, outstanding debts, income or estate taxes, etc.