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Prepaid Funeral Insurance

Even if you don't like talking about it, death is going to come sooner or later and you should acknowledge the fact that it is something that you should talk about and plan for.

With the rising costs of funerals and funeral related services, prepaid funerals are becoming more and more popular. Prepaid funerals are legal agreements made between funeral homes and people who set aside funds for their future burial expenses when they die.

A prepaid funeral plan gives you the opportunity to ensure that your wishes are carried out in the manner that you want, and that the costs of your funeral won't impose a financial hardship on your loved ones.

The prepaid funeral contract can include specific arrangements that cover costs and services. In essences, you pay now for future services that may include your own burial or cremation, use of a specific chapel, a casket of your choice including designs and colors, flowers or other floral arrangements, and certain other funeral merchandise.

A prepaid funeral contract may be revocable or irrevocable.

  • A revocable contract means that a person can cancel the contract within specific guidelines and get most of their money back.
  • On the other hand, a person can agree to an irrevocable contract which cannot be cancelled. An irrevocable contract can usually be transferred to another funeral home if it becomes necessary.

What a prepaid funeral contract does is take some of the burden off of grieving family members and friends.

  • When a person is grieving the death of a loved one, he or she may be vulnerable to funeral home practices of trying to sell their most expensive services and merchandise. A prepaid funeral plan can make decisions family members easier and help smooth the way for a lovely funeral service.

Although prepaid funeral contracts are regulated by state laws, there have been instances of abuse by funeral homes. Each state has it's own particular rules and regulations so you should take the initiative to get all pertinent information before committing to a contract with any funeral home.

State laws require funeral homes to deposit prepaid funeral contract funds into specific types of trust accounts that keep the money separated from the company's general accounts. This is to prevent embezzlement and to prevent fraudulent services. It also protects your money from the funeral homes' creditors and keeps your money safe if the funeral home goes out of business.

As with everything else, the costs of funerals do go up. A prepaid funeral plan gives you the opportunity to actually have some control over the costs of your funeral by purchasing services and related merchandise at today's prices.

Medicaid: Money paid into prepaid funeral plans is excluded when determining Medicaid eligibility. This makes it admissible for Medicaid recipients to pay for their own funerals without being penalized or forced to take the money out of the plan to pay for medical expenses.

One of the negatives associated with prepaid funeral plans is the fact that a considerable amount of your money will be locked up until you die. Some financial experts believe that this money could be invested in a better vehicle to earn capital gains, dividends, and interest.

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