Pre-need insurance allows you to plan ahead and provides your family with more security in the future. Photo by foter.com

With inflation influencing the increasing costs of products and services, funeral expenses can be saved through the use of preneed funeral insurance policies.

Weddings, they are a major rite of passage but they are considered the most stressful moments of a person's life. From the planning, arranging, scheduling appointments and booking venues; the average cost will stretch upward to $25,000. Even with 6 to 12 months of planning, it seems there still isn't enough time to iron out every detail. But where weddings are a gathering to celebrate two lives moving forward, it is the funeral service that is often an overshadowed engagement that many tend to overlook, and let's not forget a funeral is organized in three days – a challenge for any family enduring the loss of a loved one.

Unlike weddings, which allot a window of opportunity to prepare and to plan, death is the one inevitable harbinger which occurs when least expected. It often doesn't bring warnings, it doesn't make announcements or request RSVPs. Death happens and when it does, it more often than not leaves an air of uncertainty for a family. Questions arise as to what the beloved wanted, how they should be honored, the type of burial that would be suited for them, how much it will cost, how it will be paid – we know it is inevitable, but fewer than 25% plan for their funeral sendoff.

Finances and the funeral are and will always be an issue of concern for the modern family. With a variety of funeral options readily available to suit the needs of a diverse culture, funerals can range from the traditional burial to cremation, and even life celebration events that capture the personal choices of the departed. For some people, a funeral can be a small gathering with a church service and visitation, while others may want an elaborate affair for their sendoffs — one with a selection of music, a ceremony of stories and, in some cases an extravagant party to celebrate the life lived.

And while death is one of those events we, as a society, wish not to plan for it is inevitable. For that fact alone, funeral homes have been offering an alternative option for financing a funeral through pre-need funeral policies, which allows families to pay monthly for a term contract in order to cover the costs of funeral during that time of need.

The concept is an old one, dating as far back as Ancient Rome, when Burial Clubs were implemented, which allowed club members to pay a weekly fee to ensure funeral expenses for burials would be paid. However, this was simply the genesis of what would become the modern pre-need funeral insurance — an option that would not only give an individual an opportunity to select a funeral service, but further reduce the concerns of their families and friends, who otherwise would have had to guess what it was their loved one wanted for a funeral service.

However, while many financial institutions offer life insurance policies, which are generally used to pay for living expenses, children's education, or to pay off loans and debts, there are some companies in North America which focus specifically on pre-need funeral insurance policies that are designed to cover the costs of a funeral.

One of the leading companies in America is Preneed Funeral Program (PFP), a company which operates within 34 states in America and Canada. Formed by Quinn Eagan, who began selling preneed for his family-owned funeral home in 1978. While a relatively new concept at the time, Eagan saw the benefits of preneed funeral insurance being offered through a funeral home as a means of assisting both families in need of funerals and funeral home professionals. PFP has partnered with Homesteaders Life Co., a nationally recognized leading mutual insurance company that has been specializing in final expense insurance since 1906.

To bring preneed insurance to Canadian families, Eagan formed Funeral Plans-Canada (FPC) which has grown to become the largest independent preneed insurance specialists in the country. As a broker for Foresters Life Insurance Company – one of Canada's highest rated insurance companies – Funeral Plans Canada offers families peace of mind with preneed funeral insurance, which guarantees that FPC policyholders can have an affordable and memorable funeral service through a network of funeral home stretching across Canada.

As account executive of Funeral Plans-Canada, Matthew Irvine pointed out, “The number one benefit is that it takes care of the unnecessary burden of financial stress at the time of death.”

This is achieved particularly in how the insurance policy protects families who have opted to pre-arrange their funerals. Unlike traditional life insurance, which is generally used to cover the costs of day-to-day living expenses, funeral insurance focuses specifically on the costs of arranging a funeral, thus eliminating an added expense a family may incur.

“When someone enters into an agreement with the funeral home, the cost of the funeral is locked in and guaranteed,” Irvine said. “This means the funeral price will never rise.”

As with any service or product, funeral costs usually increase each year because of inflation. Preneed funeral insurance becomes more prevalent in protecting people from rising costs through an inflation guarded policy, which means regardless of increased costs of products or services, the insurance policy guarantees the cost at the time the contract was created. What this means is preneed funeral insurance becomes a worthwhile investment in guaranteeing loved ones don't have to face the burden of financial concerns of a funeral's expense when a death in a family happens.

With this, pre-arranging a funeral becomes a necessary responsibility in preparing for the unforeseeable. It allows a person an opportunity to ensure their family is taken care of. And unlike policies offered through financial institutions, Funeral Plans-Canada and PFP offer policies that allow every detail to be covered, from interment options to types of services desired. It further allows an individual an opportunity to choose and see what services they will be paying for.

But the benefits of pre-need insurance doesn't end there. Similarly to how someone will pay for products on monthly plans, pre-need funeral insurance works the same way. As Irvine explained, “Twenty-five years ago, it was more common for families to purchase products and services with a lump sum payment, but as pre-need has grown over the years, more families are realizing the financial benefit of this kind of insurance.”

In fact, Funeral Plan-Canada offers numerous options to fit any family's needs, such as the multi-pay plan, which allows families an option for paying their funeral over a period of time with guaranteed growth rates as high as 2.35%. “What these time payment plans offer is an option of 2-15 years, which enables families to pay for their funeral over time, making it more affordable for families,” Irvine said. “The interest accrued in the insurance policy is there to keep up with our increased cost of living and inflation, and there are many options of paying over time, such as monthly, quarterly, semi-annually and annually. Our policy options are very flexible and don't require lump-sum payments as they can be custom-tailored to fit anyone's budget.”

Perhaps the most important fact is that pre-need funeral insurance is a group funded annuity, which locks the funeral price at the time of agreement, meaning an individual can take advantage of the price of a funeral now instead of paying for the cost of a funeral in 15, 25, 30, or even 50 years from now.

With smart options like funeral insurance and pre-planning of personal funeral sendoff wishes, not only do these advance choices protect against the rising costs of funerals in the future, but they also relieve family members from having to carry the task of funding and planning a funeral during their time of loss. By planning ahead can save you money and ensure that your family has an added degree of security and comfort as these are compassionate, smart choices that you can make today.