My husband (age 55) is disabled. I currently have a term life insurance policy on him where I work for a nominal cost. We will be retiring to Florida within the year and that policy ends when I retire and with him being disabled I will not be able to get him affordable life insurance coverage. I am considering starting a pre-paid funeral fund to use instead. What are the advantages and disadvantages of such a fund? Or would it be better to just put money into a savings account every month and transfer it to a prepaid funeral fund at a later date?
Me step Dad prepaid for his cremation about 10 years before his death (2 years ago). He paid about $1400. When he died the cost of what he had paid for was $1000 more than he paid, but the family did not have to cough up any extra cash. That was a far better return than we could have gotten in an investment.
Mom died just a few months after moving to assisted living. It was a godsend to not have to deal with the details of all the funeral arrangements.
I moved dad near me after mom died and found that I could transfer the insurance policy to a funeral home here. This place was very nice, no hard sell. Dad died in sept and was cremated. I’ll take his ashes home next spring. Cremation was much cheaper than the original funeral plan so I was able to get a sizable refund from the insurance company paid to dads estate.
I may wait until after you retire and move to set something up. The one question I would ask is if a funeral Trust can be set up and payments made to it? Not sure how you would "set money aside for that purpose". Because if you will ever need Medicaid for DHs care, you would need to prove that money was for funeral costs. Not sure if banks set up those types of accts.
My dad died two years ago in California. We had him cremated ($2600) and the niche that will hold both him and my mother was $5800 (nameplate included). I've since found that cremation prices vary quite a bit, and I could probably have the same service for my mom for about $1900.
To save money, I have yet to put my dad's ashes in the niche, because the cemetery charges $595 every time we open it. We're waiting until my mom passes and will put them both in at the same time.
So, I'd say that if you budget $10K, you'll be fine for a cremation. Put that in an investment, and you'll grow that money instead of letting the funeral folks put it in their investments instead.