Pre Need Plan

What is a Pre Need Plan?

What are the Pros and Cons of a Pre Need Plan?

Whether you are considering or creating an End of Life Plan, which can often referred to as a Pre Need Plan, it is extremely important that you take the time to fully understand exactly how this funeral preplanning option works. However, it is also equally, if not more important, that you also review and understand all of the key advantages and disadvantages to a Pre Need Plan, especially considering the fact that most families have unique preferences, funeral planning needs, memorial service details, and financial planning circumstances.

Therefore, we cannot stress enough how important it is to not only learn and understand all the facts, but also make sure you work with a qualified professional to help ensure that you create a smart End of Life Plan that fits you, your family, and your loved ones in the best possible way.

Pre Need Plan Advantages

  1. It helps you itemize the exact costs of your funeral, including all your choices, such as your casket, burial vaults, headstones, services of the funeral director and staff, embalming, removal, transportation, preparation of remains, cremation and cremation urns, use of facilities for services and chapel, use of hearse, and many other options and preferences. (Click on this link view a General Price List)
  2. Once you preplan a funeral by choosing your final plans and preferences, you may also prepay the cost of such a plan, such as your casket, cremation urn, funeral flowers, memorial service, etc. This can be accomplished by working with one of our Qualified Pre Need Specialists to structure the exact details of what you want in your Pre Need Plan as noted above.
  3. It is considered to be “inflation-proof” because it establishes a “price-freeze”, which contractually guarantees the total costs of your prearranged plan, regardless of any future inflation or funeral price increases.

Pre Need Plan Disadvantages

  1. Unless a single-premium payment is used to fund this Pre Need Plan, you must be alive a certain number of years in order for this insurance to fund the entire costs. In other words, if you choose to fund this plan over time using either a payment plan or installments, there is a possibility that your family and/or loved ones could only receive a portion of your funeral or burial insurance. These percentages and details vary depending upon the type of plan, payment methods, your health, and the year you pass.
  2. The total costs of this plan can vary greatly depending on your age, health, and the year in which you pass.

Funeral Trusts

Many believe you should use a Funeral Trust to prepay your funeral expenses; however, since every situation is different, here are some of the advantages and disadvantages:

Advantages of a Funeral Trust

»  Your total funeral costs can be guaranteed (depending on your form of payment as mentioned above).

»  The Funeral Home or Cemetery can be named as the Irrevocable Beneficiary to ensure all funds are used for your funeral costs and/or burial.

»  The monies can be invested over time, creating the potential for your heirs to receive an amount greater than the amount of insurance.

»  Funeral Trusts are administered by the state, and are heavily overseen and regulated by the state.

Disadvantages of the Funeral Trust

»  Should the investment results not keep pace with inflation and the potential price increases for the cost of your funeral or burial, additional monies may be required at the time of death. (This can vary, depending on each individual state’s regulations.)

»  Should your investment results be high, and the funeral home or cemetery is named as the Irrevocable Beneficiary, your family will not be entitled to any excess monies.

»  You do not have flexibility in choosing a beneficiary, as the proceeds must be made payable to the Funeral Home or Cemetery.

In summary…

The goal of using this Pre Need Planning strategy, whether using an insurance policy or a Funeral Trust, is to fully pre-arrange your end of life plan through both funeral preplanning and also prepaying your funeral expenses. This allows you the peace-of-mind to know that your loved ones are left with your special gift of knowing that they do not have to address any of these difficult questions, concerns, uncertainties, worries, or stresses at a time of such grief and loss.

We firmly believe the most important step you can take when considering a Pre Need plan is to work with one of our Qualified Pre Need Specialists so they can help you understand exactly how these work, review all of your details and options, provide you with valuable materials that contain all the fine details that you should read and review, discuss their current prices by giving you a copy of their General Price List, and even provide you with a FREE quote.