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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.
Your garage door isnt just a practical entryway its a defining element of your homes exterior and can dramatically boost curb appeal, enhance value and improve energy efficiency and security. Whether youre building from the ground up or simply ready for a refresh, understanding the different types and styles will help you make the best choice for your property and budget.Sectional: Versatile and ClassicSectionals are the all-American favorite and for good reason. Made of panels connected by hinges, they glide smoothly along a track and tuck neatly overhead. Theyre available in a wide array of materials and looks, making them super customizable and compatible with almost any architectural style. If youre seeking sophistication, dependability and plenty of options to personalize, a sectional door would be an excellent choice.Carriage House: Old-World Charm Meets Modern FunctionThink barn doors, but smarter. These beauties give off warm, vintage vibes with details like decorative hardware, crossbuck features and quaint windows but they open with modern overhead convenience. Ideal for rural, cottage and rustic homes, carriage house models are not only charming they add instant character to properties where aesthetics matter.Slide-to-the-Side: Unique and Space-SavvyIf your garage has limited headroom or an unusual layout, slide-to-the-side varieties offer a creative solution. These open and close horizontally along the interior wall, making them functional in tight or tricky spaces. Theyre less common, which adds a touch of uniqueness, and are available in traditional as well as modern alternatives. Whichever you choose, your slide-to-the-side entryway will add visual interest and value to your home.Side-Hinged: Elegant and TraditionalSide-hinged types swing outward like French doors perfect for historic residences or anyone craving that custom, handcrafted vibe. Typically made of wood (though steel versions exist), theyre a chic nod to the past that can also feel luxurious and upscale. If you appreciate classic architecture and vintage elegance, a side-hinged model may be exactly what youre looking for.Tilt-Up: Retro Simplicity or Clean and ContemporaryWhether you choose canopy or fully retractable, this no-frills design works equally well with older, contemporary and budget-friendly homes. Made of one solid panel that can be opened manually or with a remote device, tilt-up doors deliver simplicity, affordability and originality. Although somewhat limited in style, newer materials can give them a fresh, updated feel that doesnt sacrifice utility.Roll-Up: Rugged and IndustrialBuilt for durability, roll-ups are made of horizontal slats that coil above the entrance. Youll often see them in commercial spaces, but they work just as well in residential settings that lean minimal or industrial. Theyre also great for tight spaces, detached structures or anywhere security is a top priority.Whether youre aiming for sleek sophistication or rustic charm, the right design will elevate curb appeal, improve daily convenience and increase the marketability of your property. Choose wisely, and your home will be the talk of the neighborhood!
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Buying a home is exciting, emotional and yes a little intimidating, especially when you start thinking about finances. If youre concerned about how much house you can actually afford, youre not alone. The good news is that by taking the right steps now, you can start your search with confidence and clarity and an eye on the future.Step 1: Know Your BudgetAs you get ready to start swiping through listings, you should first figure out what fits comfortably in your monthly spending plan. A common rule of thumb? Keep your total housing costs mortgage, property taxes, insurance and HOA fees under 28% of your gross monthly income. For example, if you make $7,000 a month before taxes, youll want to keep your monthly housing expenses to $1,960 or less.Step 2: Check Your Debt-to-Income Ratio (DTI)Your DTI is very important to lenders, telling them how much debt youre currently juggling and how the purchase of a home will increase your expenses. A lower DTI not only makes you a more attractive buyer it can also unlock better loan terms and lower interest rates. Ideally, your total monthly obligations (car payments, student loans, credit cards, etc.) should stay below 36% of your income.Step 3: Plan Your Down PaymentThe more you put down, the less you have to borrow, which means lower monthly payments and possibly not having to get private mortgage insurance (PMI). A 20% down payment is great if you can manage it, but many buyers go with 3-10%, especially with FHA or first-time buyer programs. And dont forget closing costs usually around 2-5% of the purchase price.Step 4: Explore Your Loan OptionsAll mortgages are not created equal. From 30-year fixed to adjustable-rate loans, the type you choose plays a big role in how much property you can take on (and how much youll pay over time). Before you talk with your lender, do some research, come prepared and ask plenty of questions. Youll want to learn if youre eligible for any governmental programs, if your monthly requirement could change and/or what will happen if you ever have unexpected financial difficulties.Step 5: Think Beyond the NumbersThe bank might say you can afford that dream home but whether or not you should actually purchase it is another question. Be honest about what matters most to you in terms of lifestyle. Do you want to travel, save more or splurge on concert tickets? Then you should leave room in your budget for these activities. Also remember that once you move in, youll most likely want to buy furniture and other household items as well as upgrade with new paint or cabinetry. The cost of personalizing your new residence can quickly add up.Step 6: Use a Mortgage CalculatorBefore you start seriously house shopping, try experimenting with an online mortgage calculator. It will show you how changes in interest rates, home prices and loan terms impact your monthly payment. Zillow and realtor.com offer easy-to-use tools that take a lot of the guesswork out of the budgeting process, allowing you to see results in a matter of seconds.Step 7: Talk to the ProsEvery day, real estate professionals and mortgage lenders navigate their clients through their buying journey so lean on their expertise. A good agent will tailor the search to your recommended price range and refer you to a lender who will explain your options and help you make the best decisions for your unique circumstances. You should also chat with friends and family who have recently bought a home and can give you some valuable firsthand advice.Determining how much home you can afford isnt just about cold hard numbers. Its about finding a place where you can live well and sleep easy. With a clear plan, a trusted team and a little prep, youll be well on your way to finding a property you love without breaking the bank.