How to Pre-Pay a Funeral From a Life Insurance Policy
"The average cost of a 'regular adult funeral' (funeral with embalming, viewing and a metal casket) is now $7,300," according to The National Funeral Directors Association. During the time of grief, sadness and shock that the death of a loved one usually causes, families do not need the additional burden of figuring out how to finance the funeral, or knowing that they will accrue debt to bury their loved one with dignity. While some people take out funeral insurance from insurance companies, you don't have to. It's possible to pre-pay for a funeral using your life insurance policy.
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Instructions
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Select a local funeral home in your area. Arrange a time to meet.
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Plan all the details of the funeral: select the casket, flowers, burial stone, obituary notice and plot. Calculate how much it will cost using the funeral home's price sheet.
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Meet with your lawyer and ask him to draft a funeral trust, designating the funeral home as the beneficiary of a portion of your life insurance policy. The amount that the lawyer places in the trust should be approximately equal to the costs that you calculated earlier. The trust will require that the funeral home use this money to pay for the funeral.
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Give the funeral home a copy of the funeral trust for their records.
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Let your loved ones know of the existence of the trust and who to contact about accessing it when the time comes.
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