Prepaid Funeral Plan Calculator: What to Prepay

A prepaid funeral plan calculator is a worksheet. You list each item on a funeral home's itemized price list, add the cemetery and other outside costs, and then check which of those prices the plan actually guarantees. The FTC Funeral Rule helps with the first step: funeral homes must give you prices by phone and a printed General Price List in person, and the basic services fee is the only charge you cannot decline.

What goes into a prepaid funeral estimate?

A reliable estimate has three buckets. Keep them separate, because plans often treat them differently.

Two rules make this easier. First, a funeral home must show you its General Price List with itemized prices for the goods and services it offers, including the price range for caskets and outer burial containers. Second, you may choose only the items you want, rather than a package. The FTC says you can also supply a casket or urn you bought elsewhere without an extra fee.

The Funeral Rule does not cover third-party sellers such as casket dealers, monument sellers or independent cemeteries that have no funeral home on site. Those prices go on your worksheet separately, and they are often the biggest surprises. Our guide to average funeral cost breakdown shows the national medians and what each charge covers.

How to estimate the cost, step by step

1. Choose the kind of funeral you want. Burial with a service, cremation with a memorial, direct cremation and immediate burial have very different totals. If you are unsure, our funeral type finder can help.
2. Get prices from at least two homes. The FTC recommends comparing at least two. Ask for the General Price List by phone or email, and ask for the price of the same arrangement from each home so the totals are comparable.
3. Fill in one line per item. Start with the basic services fee. Add only the goods and services you would actually choose. Embalming, for example, is not required by law except in certain special cases, and providers cannot say otherwise.
4. Add the cemetery separately. Ask the cemetery for plot, opening and closing, vault or liner and marker prices in writing. Cemeteries often require an outer burial container, but the Funeral Rule requires homes to tell you that state or local law does not require you to buy one.
5. Add cash advance items. Note that some funeral homes add a service fee or markup to these. The Funeral Rule requires them to say so if they do.
6. Ask what is guaranteed. Compare your total with the plan contract line by line.

If you want to track a budget and compare it with what you have set aside, the funeral budget builder lets you add your own line items.

Which items does the plan guarantee?

This is where a calculator and a contract can differ. A plan may lock in the price of the funeral home's own goods and services but not the items it buys from others. Before you rely on your total, ask the home these questions and get the answers in writing.

• Is each item guaranteed at today's price, or only a dollar credit toward it?
• Are cash advance items and the cemetery included or left out?
• If you pay in instalments, what is the total including interest or fees?
• If the plan is funded by insurance, does the policy pay the full benefit from day one, or is there a waiting period?
• If you cancel or move, how much do you get back?

The FTC advises asking what you are buying, how your state handles prepaid funds, whether you can cancel for a full refund, whether the plan transfers if you move, and whether your money is protected if the funeral home closes. State rules vary widely, so the answers may be different from a friend's plan a state away. If your plan might need to move, see our guide on transferring a prepaid plan.

How much could a price guarantee be worth?

No one can predict how fast funeral prices will rise, and published averages differ by year, region and service. What you can do is test a range. This table shows what $1,000 of today's prices becomes at several steady annual growth rates. It is arithmetic, not a forecast.

To use it, multiply your total by the factor for the rate and the years you expect to wait. Then compare that with what the same money could do elsewhere. A guarantee is worth more the longer you wait and the higher the increases, but only for the items the contract really guarantees, and only if the plan still exists and pays out as promised when it is needed.

Should you prepay, or set the money aside?

Prepaying locks in a plan, but it is not the only way to cover costs. The main options are:

• A prepaid contract with a funeral home, funded by a trust or an insurance policy. Protections vary by state.
• A payable-on-death (POD) bank account. The Funeral Consumers Alliance says the account stays in your name, you can withdraw the money at any time, and it is FDIC-insured, up to the standard limits. The drawback is that Medicaid treats it as a countable asset.
• Funeral or final expense insurance. This pays a set sum, not a set funeral. Our guide to prepaid plans versus funeral insurance compares the two.

The Funeral Consumers Alliance's view is that it is usually not wise to pay ahead, because cancellations or moves may not return your full payment, and survivors may not know the plan exists and pay twice. It says an irrevocable prepaid plan mainly makes sense when you are certain you need one for Medicaid eligibility. For SSI, the Social Security Administration excludes burial spaces and up to $1,500 of designated burial funds from countable resources, with some reductions, so benefits rules can affect the choice. Ask the benefits office or an elder-law attorney before you commit.

Tell your family, and keep the paperwork

The FTC warns that if your family does not know about a prepaid plan, they may pay for a second funeral. Give your executor and next of kin a copy of the contract, the price list you used and the funding documents, and keep your wishes written down somewhere other than your will. Wills are often not read until after the funeral, and a safe deposit box can be hard to reach.

What to do next

1. Request a General Price List from two or three homes and complete your worksheet.
2. Get cemetery prices in writing.
3. Ask each home which items a plan would guarantee and what happens if you cancel or move.
4. Decide whether to prepay or set money aside, getting advice first if Medicaid or SSI is involved.
5. Give your family the paperwork.