If you're trying to figure out how to ensure your family will be able to pay for your funeral when you die, paying ahead for funeral expenses is one of the best ways to eliminate a lot of the worry. However, the bill you get could seem huge -- big enough to really make your savings take a dive. In some cases, keeping that money in your savings may be the better route to take, but in many other cases, paying ahead for funeral expenses is the way to go. Here's how to tell if paying ahead is the right move for you.
Death can strike anyone at any time, of course, but in general, the later it is in life for you, the more imperative it becomes for you to have a plan in place. Someone very young, straight out of college, is likely going to have a lot of changes take place in his or her life that could affect final burial plans. But someone in his or her later years who isn't moving around will have more reason to put definite plans into place. Paying ahead is best for a person like this. It's like tying up a loose end in a case like this.
Paying ahead for funeral expenses usually means you've chosen a burial plot and know exactly where you want to be buried. If you're sure of your decision, paying ahead locks in most prices and lets your family know who to contact once they have to make funeral arrangements for you. But if you're not sure about where you want to be buried, waiting would be better. The one big exception is if you're contracting with a national company for something like cremation, where your payment and plans will be good no matter where you're living. In that case, pay ahead so that your family doesn't have to worry.
If you're totally well off and have a lot of spare cash, paying funeral expenses ahead of time is a good idea. There's really no reason not to, as long as age and location don't contradict paying ahead. But if you don't have an emergency fund other than the money you'd use to pay the funeral expenses ahead of time, work on building separate funds. You want to have enough to pay the funeral costs but also have several months' worth of living costs for an emergency. Once you do have that money, then you can look at paying ahead.
Be aware that life insurance isn't the answer to the question of how to pay funeral costs. It can take several weeks to get an insurance payout because first your family will have to get the death certificate -- this can take a while depending on how busy the records office is in your particular city -- and then the life insurance company has to process your family's request to pay out the benefit. Funeral expenses occur quickly -- they can't wait for life insurance. The insurance can help with costs overall and is worth looking into, but don't rely solely on life insurance to cover your post-death funeral expenses.
If you want more information on paying ahead for your burial, contact mortuaries and funeral home companies. They can give you a rundown of what they charge, which charges can be paid ahead, and which charges have to wait.