What You Need to Know When Paying for a Funeral

Funeral Costs

Posted on February 20, 2013 by Rachel Zeldin

Did you know that the average cost of a full-service "traditional burial" in the United States is over $7,000 excluding cemetery and reception costs?! This ranks funerals as the 2nd or 3rd most expensive life event. Unfortunatley, less than 1/3 of the US population pre-plans for this life event and less than 40% have any form of life insurance to cover funeral costs.

However, most funeral homes expect payment for services rendered upon completion of arrangements. What does this mean for you? You have to pay for everything once you have made all of the plans but before the services take place. After you have outlined all of the details around the funeral service, you may be surprised at the bottom line. Below lists the acceptable forms of payment at most funeral homes:

  1. Funded Pre-Need Contract: A funded pre-need contract was initiated and executed prior to death occurring.

  2. Life Insurance:  Verified life insurance policy(s) may be used for payment.  Some funeral homes use a factoring company which provides the funeral home with expedited payments from the life insurance proceeds.  A funeral home may require that the consumer pay the factoring fee for expedited payment services.  Those fees range from 3.50% to 5.00% of the total cost of the goods and services that the life insurance will cover.

  3. Cash/Check

  4. Credit Card: Most funeral homes accept major credit cards. Previously, a funeral home could not charge a “usage/convenience fee” for using a credit card; however with new credit card regulations that went into effect on January 27, 2013, funeral homes may now do so in select states. See this article for more info.

  5. Payments Over Time: Some funeral homes may offer in-house or 3rd party payment programs for goods and services rendered.  The qualifications for such services may be dependent on credit worthiness, down payments and interest is generally charged. OneMain (formerly Springleaf Financial Services) finances funeral goods and services for consumers*.

  6. Veteran's Benefits: If the veteran or spouse of veteran qualify with specifications by the VA, portions or even all of the funeral costs will be paid for by the VA. The veteran and the spouse may even be entitled to burial benefits at a veteran or national cemetery for free.

*Funerals360 does not endorse 3rd party finance companies. Any 3rd party company listed in this article is given simply for informational purposes and to reduces research time. As with any financial decision, consumers should research all of their options thoroughly prior to selecting one.