Funerals and burials can be very expensive, often averaging from $7,000 – $12,000. The ranges can vary significantly throughout the country, just like the price of other consumer items.
Cremation is becoming more popular. The cost of a funeral with cremation often ranges from $6,000 – $7,000, which results in a significant savings over a funeral and burial.
It is important to keep in mind that funeral homes are for-profit businesses and as a result will look to increase their profit margins by up-selling options and additional services.
When faced with handling a funeral for your loved one, the last thing you are thinking about is how to prevent from overpaying during an already difficult time. Unfortunately, there are businesses that will take advantage of you financially, just as can happen when buying cars, furniture and other major purchases.
Shop around for Funeral Services
Getting two or three quotes is highly recommended in order to avoid overpaying.
The 1984 Federal Trade Commission Rule, known as the “Funeral Rule,” requires that Funeral Homes provide up front itemized pricing of all the costs. It is important that you know and understand what is required by the funeral homes. You can read the rule issued to the funeral providers in more detail on the FTC website.
The required upfront pricing provided to you is known as the General Price List (GPL). This is an itemized list of goods and services that must be provided by the funeral home to anyone that asks, regardless of the reason. This allows consumers to compare prices between funeral homes before making a final decision.
I’m sure you won’t be surprised to learn that some of these businesses are not complying with the Funeral Rule.
For example, a Funeral home might fail to provide you an itemized list of the costs, or they might tell you a product or service is required when it is not. This is why your best weapon is to be informed.
Unfortunately for consumers, the FTC and the National Funeral Directors Association have agreed that funeral home violators of the rule can often just attend additional training and avoid public disclosure. That means that consumers don’t know who the violators are.
The Funeral Consumers Alliance is your best advocate
Found at Funerals.org, the Funeral Consumers Alliance is on the side of consumers. Their mission is to act as a consumer advocate to ensure that the public gets a fair deal on funeral services.
If you are going to spend any time learning about your rights and the laws regarding the funeral industry, their site would be the one to review.
Their site will walk you through the federal laws, unique state rules, your rights, how to file a complaint, and other important consumer information.
Consumer Rights
Some of your rights under federal law include the following:
- You have to be given an “itemized price list” before you decide what services or products to select
- You must also be given an “itemized total cost” of what you have selected before services can begin
- You have the right to supply your own products, such as a casket or urn. You do not have to choose from their offerings. The funeral home cannot charge you a fee for using the products you provided.
Ways to Reduce Funeral Costs
Some ways you can reduce funeral expenses include the following:
- Don’t disclose your “budget” up front. Just like buying a car, once the other side knows your financial specifics they will use it to their favor, often pushing you to pay up to 20% more than your plan. A selling term sometimes used in the funeral industry is “upsell without upsetting.”
- After getting the casket or urn prices from the funeral home, check with some of the high volume sellers to see if it makes sense to buy those yourself and provide them to the funeral home. Costco and Best Price Caskets are two examples of businesses with competitive prices that often provide 24 hour delivery.
- In most cases embalming is not required. Ask about other options such as refrigeration, an immediate funeral or direct cremation.
- Don’t let anyone make you feel bad if you don’t go with higher priced options, such as expensive caskets. You have to make the right choices for you and your family. Using guilt to get you to spend more is a sales tactic.
- Package deals are not required and are not always the best option. As you know, you are required to be provided with an itemized price list up front. You should look at both the itemized prices and package deals being offered to determine what is the best choice for your family,
- If you served in the military, it’s likely you can claim military benefits.
- Cremation is often much less expensive than a burial if that is an option for you.
- You can read more about cost savings measures on this page of the Funeral Consumers Alliance Website.
Cemeteries
Cemeteries do not fall under the FTC Funeral rules as discussed above, only funeral homes. As a result, you have to look to your state laws to determine your rights regarding burials.
Just like with funerals, you will be faced with costly decisions on what to include and not to include. Some are dictated by the cemetery, and not necessarily required by state law.
For example, a burial vault (box around the casket) is generally not required by any state law, but might be required by a particular cemetery. It’s best to check with a few cemeteries to determine what they require so you can find one that meets your requirements.
Pre-planning vs Pre-paying for a funeral
Generally speaking, it makes a lot of sense to pre-plan a funeral, but not to pre-pay for it.
Pre-planning means that you and your family are on the same page regarding your wishes. This eliminates a lot of the pressure and decision making that would otherwise be cast on family members.
For example, your family will know what items you really value and want, versus unnecessary services. Some of those decisions might include cremation vs burial and a ceremony at a funeral home, house of worship, or no ceremony at all. One place you could provide all of this information would be in your family emergency binder.
Pre-planning almost always results in cost savings because you are not buying services or options that are not wanted.
Pre-paying for a funeral, on the other hand, can be risky. The further in advance you pay for a funeral, the higher the likelihood that the funeral home could be sold, close, or develop a poor reputation. In addition, your personal situation could change, such as moving out of state.
Family members are also sometimes not aware of the pre-payment contract and agreed upon services, and may be surprised that additional fees still need to be paid. Family members are also sometimes not informed about the pre-payment, resulting in the family unknowingly using a different funeral home altogether.
What about funeral insurance?
Burial insurance is a life insurance policy intended to cover funeral and relates expenses. In some states these can be sold by funeral homes.
The Funeral Consumers Alliance does not recommend this type of insurance, as the total of premiums paid is often much larger than what the funeral costs would be. In other words, it is usually not a good deal for most consumers.
You can get a quote and run the numbers yourself to determine if the deal appears fair or not. If you determine it’s not a good deal, you could put the amount you would pay in premiums and instead fund your own bank account (self insure) designated as POD (payable on death) to a trusted family member who would have access to the funds upon your death to pay funeral expenses.
See this page on the Funeral Consumers Alliance website for other ways to pay for a funeral.
Watch out for Bereavement scams
Unfortunately, unscrupulous individuals will prey on anyone, even stooping so low to take advantage of people grieving the loss of a loved one.
Many of the scams follow along the same vein as other scams whereby the scammer impersonates another person or business in an attempt to get you to send them money. Don’t fall for it!
Being aware of these funeral scams is probably the best line of defense. Also following good general practices in your life of always validating any request by only using the contact information you know to be legit, and not from a phone call, text, or email that you can receive from anyone on planet earth who can claim to be anyone.
In other words, hang up the phone and don’t provide any information. Then, call the legitimate business yourself and find out if the request is true or false.
Obituary scams
For example, let’s say that a criminal who takes part in common scam know as an obituary scam and gets your personal information, simply by reviewing an obituary of a loved one and then obtaining your phone number.
Subsequently you get a text or phone call from someone claiming to be debt collector, stating that the deceased owes money for unpaid bills that need to be paid right away. You comply by sending the money via wire transfer, only to find out later that you were scammed!
The number of angles these scam artists attempt to use almost appear to be endless. You can protect your family by keeping personal dates and details out of the obituary so that it is not available to anyone. In addition, notifying the IRS with a copy of the death certificate will allow them to flag the account to be on the lookout for fraudulent refund returns.
Other criminals will get the personal data of the deceased and use it to borrow money by attempting identity theft. That is why it’s also important to notify the three major credit bureaus (Equifax, Transunion & Experian) so they can put a death notice in their files to prevent identify theft claims for new credit.
You can read more about the many variations of these common scams and how to prevent them on the AARP and Ever Loved websites.
Conclusion
Funerals can be quite expensive, requiring you to make quick decisions at a time when you are least emotionally prepared to do so.
Understanding your rights goes a long way to ensure you are not taken advantage of. Pre-planning your final arrangements, but not pre-paying, can be a good strategy to make these important decisions ahead of time for your loved ones.
Executive Summary: Tips to avoid overpaying for funeral home services
- Funerals are quite expensive, often requiring the family to make large financial decisions when they are least emotionally ready to do so
- Pre-planning for a funeral by making your desires clear to your family will take the burden off of them and reduce the costs to only what you want
- Pre-paying, on the other hand, has an element of risk that includes the funeral home closing or you moving to another state
- The FTC funeral rule requires that you receive an itemized price list before you select products or services
- The FTC funeral rule also requires that you get an itemized total cost of your selections before any services can begin
- Understanding your rights by reviewing the Funeral Consumers Alliance website is likely the best way to ensure you get a fair deal
- You have options to reduce funeral costs, such as supplying your own casket or urn, without incurring additional fees to do so
- Funeral insurance can sometimes be more expensive than it’s worth. Run the numbers yourself and consider self insuring as an option.
- You and your family need to be on alert for bogus debt collectors executing bereavement scams to avoid being taken advantage of
