How to Pay for a Funeral

Paying for the funeral of a loved one in the United States is expensive. The median cost of one with burial is $7,848, while the median cost of a funeral with cremation is $6,970, according to a 2021 report by the National Funeral Directors Association.1 What’s more, most funeral homes require payment up front, so families are often forced to come up with that hefty sum during a very emotional time.

However, these expenses don’t have to drain your or your relative’s bank account. There are ways to ensure that you are paying only for what you want and to find monetary assistance if you need it.  

KEY TAKEAWAYS

• Funeral providers are permitted to charge all customers a basic service fee for certain elements of the funeral.
• Insurance, savings accounts, and prepayment plans allow customers to arrange funds for their funeral before their death. 
• Assistance programs are available to help those in need pay for a funeral.

Expenses Included in the Cost of a Funeral

It’s important to understand which costs are required and which are optional to keep from overpaying for a loved one’s burial or cremation. The Federal Trade Commission (FTC) enforces what’s known as the Funeral Rule, which is set up to help you choose the goods and services you want or need and to pay only for the ones you select, regardless of whether you are planning ahead or making arrangements when a death occurs.

Funeral costs start with a basic service fee that funeral providers are permitted to charge all customers, according to the FTC. This basic service fee covers the following elements of the funeral:

• Funeral planning
• Preparing funeral notices
• Obtaining permits and death certificates
• Caring for the decedent’s remains
• Making arrangements for burial, cremation, or handing off to third parties
  

Funeral Expenses That Are Optional 

There are additional services that are considered optional for a funeral, according to the FTC. These are not covered in the basic service fee. They include:

• Embalming or other preparation of the remains
• Arranging a viewing at the funeral home
• Hosting a ceremony or memorial service at the funeral home
• Providing staff and equipment for a graveside service
• Transporting the remains
• Providing a hearse or limousine
• Elements for interment or burial, including a casket, outer burial container, or alternate container such as an urn
• Cremation or interment

Funeral providers also charge fees known as cash advances to cover services from other vendors that the funeral provider handles on your behalf. These include:

• Pallbearers
• Officiant 
• Musicians and singers
• Obituary notices
• Flowers

How to Pay for a Funeral 

No one wants to face a large bill for a funeral when they are grieving the loss of a loved one. It’s far preferable, when possible, to make arrangements in advance, utilizing one or more of the following sources of funds.

Life Insurance 

Purchasing a life insurance policy can provide the necessary funds to cover funeral expenses. After the policyholder’s death, the life insurance company will disperse a lump sum to the beneficiaries on the policy. These funds can be used to pay funeral costs. However, if you purchase life insurance to help cover funeral expenses, the Funeral Consumers Alliance (FCA), a death-care industry watchdog group, advises against purchasing preneed insurance or burial insurance because the premiums you pay in typically cost more than the benefits that the policy pays out.

Savings

Stashing funds into a savings account can be a great way to ensure that your loved ones have the money needed to cover your funeral. However, it’s important to set up a joint account so loved ones can access the funds when needed to pay the funeral provider. This could be a spouse, the executor of your will, or another trusted individual. Another option is setting up a payable on death (POD) account, in which the funds are dispersed to a named beneficiary upon the account holder’s death, avoiding the delay of probate court. 

Prepayment

Many funeral providers offer a prepayment plan to cover funeral expenses. For example, you might place the funeral funds into an interest-bearing account or insurance policy with the funeral provider listed as the beneficiary. Upon your death, the funds are transferred to the funeral provider. 

Pay with Cash or Credit

If the funds are available, you can simply pay for the funeral with cash, check, or a credit card. If necessary, check with the funeral provider to see if you can pay the fees in installments. 

Note: Next of kin of a military veteran or reservist may be eligible to receive a burial flag to drape on a casket (or coffin) or place with an urn.

Leverage Assistance Programs 

There may be assistance programs or benefits available to help you pay for a funeral. The following are examples of sources of assistance to look into: 

• Employer: Check to see if the deceased’s employer offers survivor benefits to help cover funeral expenses. 
• Government agencies: If the deceased received Social Security benefits, the surviving spouse can receive a death payment of $255.6 For those receiving benefits such as Medicaid, Supplemental Security Income (SSI), or Social Security Disability Income (SSDI), the family may receive additional—though minimal—monies. States and/or county social services departments also may offer assistance. 
• Veteran’s benefits: If the deceased is a veteran, they can receive a free burial and headstone in a national cemetery. Additional benefits may be available if the deceased was on active duty, died from service-related injuries, was in a U.S. Department of Veterans Affairs (VA) facility, or received a VA pension or disability. If the deceased is the spouse or dependent of a veteran, they also may receive some burial benefits. 
• Victims’ assistance: If the deceased was the victim of an accident or homicide, the family may receive funds from the local or state Victim Compensation Program.
• Fundraising: Families may work with their church and/or community to raise the necessary funds through special events such as concerts, bake sales, and other activities. Crowdfunding sites such as GoFundMe also are options for collecting donations. 
  

How much does a funeral cost?

A funeral can cost $10,000 or more, according to the Funeral Consumers Alliance.4 But the median cost of a funeral with burial is $7,848, and the median cost of one with cremation is $6,970.

Can I prepay for a funeral?

Yes, many funeral providers offer plans to prepay for a funeral. But there are options that may be better, including taking out a life insurance policy, setting aside savings, or creating a payable on death (POD) account at your bank or credit union.

Can my family get help to pay for my funeral?

It’s possible. Many assistance programs are available that are designed to help families pay funeral expenses.

The Bottom Line 

Dealing with funeral expenses while grieving a loved one can be daunting, but there are ways to pay for a funeral that can help make the process less onerous, provided that you do them in advance. These include purchasing a life insurance policy and setting up a savings account. Those in need may also be able to take advantage of assistance programs. These options can provide peace of mind for the families left behind.