Different Types of Funeral Plans and Their Shortcomings


Planning for your own funeral is never an easy decision. However, as is with most things in life, one must be practical and have the right measures in place. Today, we’re going to go over some of the different finance options you have when it comes to paying for your funeral. We will go over different policies, insurances, and trusts that you can opt for to ensure that all expenses for your funeral are covered.

Regardless of what path you choose, you should know that experts discourage the usage of the payment methods given under this article. We’ll be discussing the reasons for this negative opinion as well!


Under a revocable trust, you are under a legal obligation, by way of contract, to pay for your funeral’s projected cost in installments. A funeral director will have to be appointed as a trustee of the trust and will be responsible for making deposits of your installments into an interest-bearing account. Upon your death, the funds are withdrawn by the funeral director and are used to pay for your funeral.


Just like any other policy, the subscriber will be paying regular periodic premiums. A beneficiary is named under the policy who shall receive the payout from the policy. The beneficiary is restricted to use the funds in accordance with the policy and solely for funeral expenses. Depending on the policy, the remaining amount could either transfer over to the estate and or be kept by the beneficiary. Depending on the state you live in, you may just have to nominate a funeral home director as the beneficiary rather than a family member or friend.


Under this policy, all costs of your funeral are covered and the beneficiary is allowed to use the death benefit however they choose. The restrictions that are found in whole-life policies are not found under burial insurance policies.


There are many reasons why experts are skeptical and sometimes outright against such payment plans. The first reason is that the funeral home nominated under these policies and trusts could go out of business, effectively rendering these plans useless. Another reason is that the funeral home may lose its reputation over the years and, upon your death, your family may want to arrange your funeral at a more respectful place. However, they would be stuck as the terms of the policy or trust will have to be followed.

Economists have also stated that the pay-out from these trusts and policies are not significant when compared against the amount of premium one pays. Also, sometimes a certain time period has to lapse before the entitlement to the fund triggers. You could die a year after subscribing to a policy only to find out that you would be eligible for a payout after the five-year mark.

Also, if you happen to not make your family aware of any such arrangement, they could just end up paying out of pocket at another funeral home without knowing that there is money stored away for that very purpose.

Regardless of how one may feel about these options, ti is important to have some plan in place. If you consult an expert you could also find a policy that addresses all of the above criticisms. You could opt for a professional consultation service like NGLIC Funeral Preplanning to find out about any such plans.