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Three years ago, Larry Refsland, who works at a marketing company in
Northern Minnesota, experienced the deaths of both his mother and mother-in-law
in the same year. Since their passing, Larry has reflected a lot on the
differences between the two funeral experiences. “After my mother-in-law's
funeral, we owed $9,000," he says. “After my mother's, we owed
nothing."
While both women had lived in the same rent-controlled housing and were on
the same fixed monthly income, Larry's mother made monthly funeral payments on
prearranged services. Larry's mother-in-law, on the other hand, had no such
plans, and her family had to cover the bill for her funeral expenses on the
spot.
Choosing a prepaid funeral plan and making monthly payments can ensure
your family and loved ones don't find themselves in a similar situation.
In this article, you will learn:
The different ways to
pay for your own funeral, cemetery or cremation expenses in advance
How prepaid funeral
plans work
How much prepaid funeral
plans cost
What prepaid funeral
plans cover
What happens if you miss
prepaid funeral payments
If prepaid funeral plan
payments affect your ability to qualify for Medicaid
How to pay for a funeral or cremation
According to the National Funeral Directors Association, the median
funeral cost in the United States in 2019 ranged from $6,645 for a cremation
with a viewing and memorial service to $9,135 for a funeral with a viewing,
service and vault. When cemetery costs are factored in, the total median cost
of a funeral can exceed $10,000. Even simple cremations with no service can
exceed the savings a family has on hand. (Read our full coverage on funeral,
cemetery and cremation costs here.)
Especially when coupled with the grief of losing a loved one, it's
important for each one of us to document and fund funeral plans in advance to
relieve the financial and emotional burden as much as possible.
The bottom line: When you pass away, your family is responsible for
your funeral, cremation and cemetery costs. Besides paying with cash on hand,
there are just a few options available to pay for these expenses: prepaid
funeral plans, life insurance, veterans benefits, or a few last resort options
at the time of need.
Paying for funeral expenses with prepaid funeral plans
Because funeral homes, cremation providers and cemeteries don't typically
offer payment plans at the time of need, most offer monthly payment plans in
advance in the form of prepaid funeral and cemetery arrangements (also called
pre-need funeral plans). Prepaid funeral and cemetery plans take the financial
burden and emotional guesswork out of a difficult time in life. Plus:
Typical objections to prepaid funeral plans:
Paying for funeral expenses with a
life insurance policy
If you carry life insurance, it may cover some or all of your funeral and
the burial costs. The downside is that life insurance can take a month or
longer to pay out, while you will be billed before the funeral takes place. It
also does nothing to make your final wishes known to your loved ones, and
leaves them with the difficulty of selecting a provider and making detailed
arrangements during a time of grief.
Also, families often misunderstand their life insurance policies, and can
be disappointed when they have expired or don't provide the coverage they
expected for final expenses.
Term life insurance is a temporary insurance policy with an
expiration date, usually between five and 30 years. If you die during the term
of the insurance, your beneficiaries receive a pay out. It is most often
carried by adults in the prime of life with dependent children or mortgages.
Most older adults either do not qualify for term life insurance due to medical
exam requirements, or the premiums are too expensive. If you believe your final
expenses will be covered by a term life insurance policy, please check your
policy to ensure that the premiums are current and it is not expired.
Whole life insurance is designed to cover income replacement and
end-of life expenses like funeral costs and medical bills. As long as the
premiums are paid, it covers you until you die. Premiums are typically higher
than term life insurance, while the fixed pay-out amounts are usually lower.
Health conditions can still prevent some older adults from qualifying, but
instead of a medical exam it just requires medical questions to be completed
during the application process.
Final expense insurance is a specific type of whole life insurance,
also called burial insurance or funeral insurance, which pays a lump sum upon
death and is specifically designed to cover funeral costs. It isn't intended
for income replacement like other life insurance products. If you don't know
what you want for your funeral, or can't bring yourself to discuss your wishes
with a funeral provider, it is a good alternative to buying a prepaid funeral
plan. But it doesn't lock in prices like a prepaid funeral plan does, nor does
it help your family make the funeral arrangement process easier. Families
sometimes find themselves with an insurance pay out that doesn't cover the
complete funeral expenses.
None of the above will pay out in time to pay a funeral home bill. A
family would need to pay the bill another way and wait for one of these plans
to pay out and then reimburse themselves.
Paying for burial expenses with U.S.
veterans benefits
For U.S. veterans in 2020, the U.S. Department of Veterans Affairs will
pay a $300 burial allowance and $780 for a plot (for a nonservice-related death
outside a VA hospital) or a $796 burial allowance and $796 for a plot (for a
nonservice-related death at a VA hospital). However, these benefits are not
automatic and they apply only when the veteran is being buried in a national
cemetery. Even then, these allowances are usually not enough to cover all
expenses, so veterans benefits usually need to be combined with cash or another
type of coverage plan.
Last-resort options for paying for
funeral expenses
The remaining alternatives for paying for funeral expenses are usually a
last resort when death has occurred and there is no cash on hand.
A credit card. High interest rates make this not a great solution,
but some families do take this route.
A bank loan. If you have good credit and are comfortable with taking
on debt, you can apply for financing at a bank or credit union. This can take
time when time is of the essence.
A family pool. Family members can come together and pool their money
to help with funeral costs. Some families turn to crowdfunding sites like
GoFundMe to make this process easier.
Frequently asked questions about the
prepaid funeral cost breakdown
Understanding prepaid funeral costs doesn't have to be difficult. Here we
answer a few questions.
How much do prepaid funeral plans cost?
Because prepaid funeral, cemetery or cremation plans set aside funds for
specific products and services, the amount of the plan doesn't exceed the
actual planned cost of the funeral. Unlike insurance plans, you stop paying
your monthly payments when the plan has been fully funded. Prepaid funeral
plans usually start in the low thousands and range up from there, depending on
your wishes. They are usually payable over 3 to 10 years.
What do prepaid funeral plans cover?
A prepaid funeral plan is created by you, so it covers the things you
decide are important. You can plan a simple gathering or a grand event. For
traditionalists, it can include embalming, a premium casket, flowers and
catering, and cemetery property. Or you could elect for a simple cremation and
a mausoleum niche for your ashes. When you meet with a pre-planning
professional, you'll learn about all of your options. Make an appointment.
What happens if you miss a prepaid funeral payment?
A prepaid funeral plan is similar to car insurance in that if you miss a
payment, you receive a lapse warning. After 90 days of nonpayment, your plan
may be cancelled. If that happens, you would still be able to use that money to
fund future arrangements, but you would lose any price protection.
Do prepaid funeral plan payments affect your ability to qualify for
Medicaid?
When you buy a prepaid funeral plan, it is generally excludable for the
Medicaid spend-down process. Unlike traditional insurance, it won’t affect your
ability to qualify for Medicaid. However, many states limit the amount you can
put into a funeral plan to between $5,000 and $15,000. Please discuss any
concerns with your pre-planning professional and your Medicaid
caseworker to make sure your needs are met.
What happens if my prepaid funeral,
cemetery or cremation provider goes out of business?
At Dignity Memorial, your money is kept safe by a third party (an
insurance company or a trustee, not the funeral home) until the time of your
funeral. Then it is given to the funeral provider to cover your funeral
expenses at the time of need.
What happens if I move?
When buying from a Dignity Memorial provider, prepaid funeral and cemetery plans are easily transferred between one of our 1,900+ locations in 47 U.S. states, Canada and Puerto Rico when you move more than 75 miles away.
Planning a funeral ahead of time
We recognize that funeral arrangements and associated expenses can be
overwhelming. By preparing in advance, you provide a sense of relief, peace of
mind and comfort for your loved ones while ensuring your wishes are met and
your budget is maintained. When you pre-plan a funeral you honor both yourself
and your family.
If you work for a midsize or large company, you may soon be able to review your employee benefits package, as we are entering the open enrollment season. So, consider your options carefully, with an eye toward making changes appropriate for your needs. Here are some of the key areas to look at: Retirement plan Depending on your employer, you could change your 401(k) or similar retirement plan at any time of the year, but you might want to use the open enrollment season to review your contribution amounts. If your salary has gone up over the past year, you might want to boost your pre-tax contributions (including catch-up contributions beginning at age 50). At a minimum, try to put in at least enough to earn your employers match, if one is offered. At the same time, look over how your contributions are allocated among the various investment options in your plan. Youll want your investment mix to reflect your goals, risk tolerance and time horizon. Life insurance If your employer offers group life insurance at no cost as an employee benefit, you may want to take it but be aware that it might not be enough to fully protect your family should anything happen to you. You may have heard that you need about seven to 10 times your annual income as a life insurance death benefit, but theres really no one right answer for everyone. Instead, you should evaluate various factors including your mortgage, your income, your spouses income (if applicable), your liabilities, the number of years until your retirement, number of children and their future educational needs to determine how much insurance you need. If your employers group policy seems insufficient, you may want to consider adding some outside overage. Disability insurance Your employer may offer no-cost group disability insurance, but as is the case with life insurance, it might not be sufficient to adequately protect your income in case you become temporarily or permanently disabled. In fact, many employer-sponsored disability plans only cover a short period, such as five years, so to gain longer coverage up to age 65, you may want to look for a separate personal policy. Disability policies vary widely in premium costs and benefits, so youll want to do some comparison shopping with several insurance companies. Flexible spending account A flexible spending account (FSA) lets you contribute up to $3,200 pre-tax dollars to pay for some out-of-pocket medical costs, such as prescriptions and insurance copayments and deductibles. You decide how much you want to put into your FSA, up to the 2025 limit. You generally must use up the funds in your FSA by the end of the calendar year, but your employer may grant you an extension of 2 months or allow you to carry over up to $640. Health savings account Like an FSA, a health savings account (HSA) lets you use pre-tax dollars to pay out-of-pocket medical costs. Unlike an FSA, though, your unused HSA contributions will carry over to the next year. Also, an HSA allows you take withdrawals, though they may be assessed a 10% penalty. To contribute to an HSA, you need to participate in a high-deductible health insurance plan. Make the most of your benefits package it can be a big part of your overall financial picture. Chad Choate III, AAMS828 3rd Avenue WestBradenton, FL 34205941-462-2445chad.chaote@edwardjones.com This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.Edward Jones, Member SIPC
Practical Tips for Safety, Independence and JoyAbout the Author: Sherri Snelling is a leading gerontologist, author, and expert in aging and caregiving. She is dedicated to educating and empowering families on promoting dignity, purpose, and well-being for older adults. Dementia and Alzheimer's disease (AD) are a growing concern for many families which is why it is important to be well-informed and well-prepared to support a loved one. Nearly 7 million Americans are currently living with Alzheimer's, the most prevalent type of dementia representing 70% of all dementia diagnoses, according to the Alzheimer's Association. In addition, these adults are being cared for by 11 million family members, and by 2050 Alzheimers is expected to nearly double, reaching approximately 13 million. A dementia diagnosis is a diagnosis for the whole family. While an Alzheimer's or related dementia diagnosis can be daunting, it is important to help an AD adult maintain a healthy and fulfilling life in the comfort of their own home. Research suggests that staying at home as long as possible is linked to a better quality of life for those with dementia and Alzheimer's.1Dementia family caregivers whether an adult child, spouse or other family member can find their caregiving role challenging but also rewarding. Following are some tips and guidance to help make it easier to provide care at home for a parent, spouse, or grandparent with Alzheimer's, while also finding moments of connection and joy.Creating a Safe and Comforting Home EnvironmentIssues related to Alzheimer's and dementia can impact an individual's ability to keep themselves safe. To make the home a safer and more comforting place, consider the following steps: Secure hazardous areas: Lock garages, basements, and sheds, especially where hazardous materials or tools are located, since 60% of AD adults wander and may be in danger of falls or other health risks.Enhance lighting: Keep walkways and rooms well-lit as a person with Alzheimers may have impairment of their visual field and their pupils often adjust more slowly to both bright and low light so maintaining good lighting throughout the home is essential.Minimize tripping hazards: People with AD have impaired balance so remove clutter and obstacles to create a clear path for movement and reduce the risk of fallsInstall handrails: Consider adding handrails or chair rails in hallways to assist with balance, as Alzheimer's can affect motor skills.Establishing Routines for Familiarity and IndependenceMaintaining routines and schedules can help reinforce a loved ones sense of familiarity, of control and independence while also reducing anxiety. A consistent routine actually uses rote memory rather than working memory and is easier for AD adults to maintain in the early and mid stages of the disease. Routines not only benefit the individual with Alzheimer's but also makes it easier for caregivers to plan their day and manage caregiving responsibilities.Fostering Joyful Moments Through Creative ActivitiesEngaging in everyday positive moments through creative activities and social events can significantly enhance the quality of life and overall health for individuals with Alzheimer's. Activities that keep older adults engaged include:Memory-related activities: Take a trip down memory lane by looking at old photos, taking a joyride to familiar places in your loved ones past or just reminiscing about past experiences.Sensory engagement: Stimulate the senses with their favorite music or the aromas of beloved foods, which are two powerful ways to spark positive memories. Music memory is the longest memory kept within an Alzheimers brain.Art projects: Simple art projects can keep their hands and minds busy, fostering creativity and relaxation. Keep in mind the sense of touch tactile projects with different types of touch sensations are very engaging for someone with AD.Physical activity: Encourage physical activity, such as walking, to help maintain a regular sleep schedule and promote overall well-being. Studies have found walking in nature is more beneficial than walking inside for everyone including those with dementia.2The Role of Professional CaregiversProfessional caregivers can play a crucial role in creating a personalized care plan that allows your loved one to experience greater well-being through positive moments, meaningful connections, and a more purposeful life. This is especially valuable in the familiar environment of home, where comfort and security are paramount. They also can provide important respite breaks for family caregivers who find dementia caregiving can take an emotional and physical toll.Connecting with an in-home caregiver network, like Comfort Keepers, can provide the specialized care needed for seniors with dementia. Comfort Keepers offers highly trained caregivers who are equipped to help older adults stay engaged physically, mentally, and emotionally while living independently at home. References1 Leverton, M., & Pui Kin Kor, P. (2023). Supporting people with dementia to live at home. BMC geriatrics, 23(1),681. Retrieved from: https://bmcgeriatr.biomedcentral.com/articles/10.1186/s12877-023-04389-w 2 Boere, K., Lloyd, K., Binsted, G., & Krigolson, O. E. (2023). Exercising is good for the brain but exercising outside is potentially better. Nature scientific reports, 13(1), 1-8. Retrieved from: https://www.nature.com/articles/s41598-022-26093-2
People over the age of 65 are more likely to be readmitted than younger patients, and readmission can be more serious for seniors.Readmission after an illness or injury is a serious health issue for seniors. However, it is important for seniors and their loved ones to remember that in many cases, readmission is avoidable and can be prevented with a thoughtful post-hospital care plan.Nearly one-fifth of all Medicare patients in the United States who are discharged from the hospital end up returning within 30 days. There are many reasons seniors may need to be readmitted to the hospital, but healthcare agencies are focused on finding ways to reduce these numbers and educate patients about how to have a healthier recovery at home.For many seniors, this means having a quality caregiver that can help them overcome some of the main preventable causes for returning to the hospital. Consider the following:Medication is critical: Some seniors need assistance taking medication in the right amount on the correct schedule. When you consider that, on average, seniors with chronic conditions fill 50 different prescriptions annually, it is not difficult to imagine how someone could get confused when a new medication is added to their regimen. Caregivers can not only remind seniors to take medications as prescribed, but they can also help seniors keep a list of those medications and their dosages so the information is readily available for healthcare professionals. Managing medications is one of the best ways a caregiver can help seniors during their recovery.Follow up visits prevent readmission: A full two-thirds of patients readmitted to the hospital would have avoided that trip if they had seen their physicians within two weeks for follow up. The reasons for not following up vary but can include transportation difficulties and forgetting to make or keep appointments. Hospital staff can aid the senior by setting up appointments for the individual before discharge, but getting to the appointment can still be a challenge. In addition to a host of uplifting care services, caregivers can provide transportation to appointments and keep track of any post-care visits.Discharge plans only work when implemented properly: Having a discharge plan for the patient before he or she leaves the hospital can be crucial for recovery, but it can be difficult for seniors and their family members to focus on the plan during the stress of the illness and discharge. Caregivers can help the senior follow the instructions, and will connect with family or other approved individuals when there are problems or change in condition during recovery. They can also help explain the information or ensure that the appropriate person is notified if the older individual has questions about his or her course of treatment. This takes the stress off the family and the patient so he or she can focus on recovery.Having a helping hand during recovery can ensure positive outcomes and a return to an active, engaged life. Family members, friends and neighbors are often willing to serve as a post-hospital recovery caregiver, but there is professional help available for those that dont have someone nearby to assist them. For long-term recovery, those who have the assistance of friends and family can benefit from a professional caregiver to provide respite care and support. Comfort Keepers Can HelpComfort Keepers caregivers can help with encouragement, support and assistance with daily living. And, caregivers can encourage overall health through meal planning, grocery shopping, meal preparation and activities. Our custom care plans focus on physical and mental health and wellness activities. Our goal is to see that clients have the means to find the joy and happiness in each day, regardless of age or acuity.To learn more about our in-home care services, contact your local Comfort Keepers location today. ReferencesRelias. What you need to know about readmission among seniors. Web. 2016.American Hospital Association. Examining the drivers of readmissions and reducing unnecessary readmissions for better patient care 2011 AHA Policy Research. Web. 2011.Robert Wood Johnson Foundation. Ten things you should know about care transitions. Web. 2013.