Busting Prepaid Funeral Plan Myths

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A Google search for “prepaid funeral plans” results in conflicting advice warning of scams and pitfalls. But many of these myths are based on experiences people have had with providers who are not well-known or long established. Most can be avoided by working with a reputable and trusted provider, allowing you and your family to reap the many benefits.

Myth: Your money is better off in the bank. 

Fact: It’s a mistaken belief that your money should be earning interest in a bank rather than being used for a prepaid funeral plan. Like most things, funeral costs have increased and will continue to do so.

By planning and funding your funeral in advance, you lock in today’s prices on many items and avoid future inflation. That means that even if prices go up, your loved ones won’t have to pay more.

Myth: A funeral home can go out of business and you’ll lose your investment. 

Fact: While it’s true that a business can fold, when you purchase a plan through a trusted, reputable provider, you won’t be affected. Regulations require that prepaid funeral plan payments are securely invested with an independent entity—either an insurance provider or trust. If the funeral home goes out of business, the money in your plan can be transferred to another provider. 

Myth: If you move, your family will have to return to the area where you purchased your prepaid funeral plan or lose the money. 

Fact: Reputable funeral homes allow prepaid funeral funds to be transferred to another provider if you relocate. With Dignity Memorial® you can transfer your plan to any qualified provider over 75 miles away from the original funeral home. If the funeral home you choose isn’t part of the Dignity Memorial network, the funds in your plan are still available to your family.

Myth: Life insurance covers funeral expenses.

Fact: If you have a life insurance policy, it’s not safe to assume it will cover your end-of-life expenses. Why?

Funeral expenses are due at the time of service, and life insurance policies typically don’t pay out until weeks after death, which means your family will need to pay the expenses up front. And, there’s no guarantee that the life insurance payout amount will cover the cost of funeral expenses.

Myth: If you pass away before paying off your prepaid funeral plan, it won’t cover funeral costs.

Fact: Most reputable providers offer funeral plans guaranteed to cover all of the prearranged services as long as your account is current. That means that as soon as you make the first payment, your arrangements are covered. This isn’t true of all prepaid plans, however, so be sure you discuss your options thoroughly with your funeral planner.

Myth: High-pressure sales tactics lead you to buy things you don’t want or need.

Fact: When you meet with a reputable planning professional, you’ll learn about all of your options for planning a funeral, cremation and celebration of life. They’ll carefully listen to what’s important to you and help you plan accordingly—without pressuring you into unwanted items beyond your budget.

Plan with Dignity Memorial

We know making the decision to take care of final needs in advance is difficult, and many people don’t know where to start. Our free guide, The Insider’s Guide to Funeral & Cremation Planning, will help get you started. Contact us today to find out more about the special savings and benefits available to CARP members and their families. Visit CARP.DignityMemorial.com to download our free guide or call 866-668-1841.