Paying Funeral Costs
Funeral homes, cemeteries and other funeral service providers expect to receive payment in full at the time of the funeral. Check and credit card are the typical forms of payment. Some funeral providers will accept assignment of life insurance proceeds. If funeral insurance had been purchased in advance, the insurance carrier will pay the funeral providers directly.
What Will Your Funeral Cost?
The funeral service industry is increasingly the target of criticism over the cost of funerals today. Media reports and exposés have publicized the issue and raised the concerns of consumers. So do funerals cost too much? And what is a reasonable price to pay for a funeral? There may be no truly objective answer to these questions, but here are some factors to consider about funeral costs.
Industry Average Costs
According to the 2010 price survey by the National Funeral Directors Association, the average cost of an adult funeral is $7,755.00. This is based on the most commonly selected items for a traditional funeral including a casket and vault. However, it does not include cemetery costs. A grave space, a grave marker, and opening/closing the grave can easily cost another $1,500 to $2,500. Therefore, a typical traditional funeral is likely to cost over $9,000 and can easily exceed $10,000 if a high-end casket and vault are selected. A traditional funeral can also cost less than $5,000 if the buyer is willing to select more basic services and merchandise. If no services to commemorate the deceased are desired, a direct burial or direct cremation can be arranged for under $1,000.
Controlling Funeral Costs
A funeral doesn’t have to be expensive to be meaningful. Careful planning takes into consideration the costs vs. the benefits of the various options for funeral services and merchandise. Allocate more of your funeral dollars to those items that have the most meaning to you. A casket of the highest quality may be of utmost importance. Or you may choose to go with a rental casket to free more dollars for a mausoleum crypt or an extended visitation period.
Planning in advance is the key because it allows you the time to carefully consider your options and to “shop” and compare prices. At a minimum, you need a basic funeral plan to determine how much your funeral is expected to cost.
What’s Included in Funeral Prices
Criticisms of funeral pricing are often directed at the percentage “mark-up” over actual cost that funeral homes and cemeteries include in their prices for services and merchandise. However, to keep funeral prices in perspective, you must consider that funeral homes and cemeteries have high fixed operating costs (i.e., “overhead”). For example, cemeteries bear the cost of maintaining the cemetery grounds, theoretically forever, regardless of how many burials they handle. Likewise, before a funeral home operator handles even one case, it must invest in the funeral home facility, vehicles, and the equipment necessary to carry out a traditional funeral. And it must have staff on call 24 hours a day, 7 days a week because a death can occur at any time. In this regard a funeral home is like a fire station that must have all the necessary resources ready to go even though a fire may not occur for days or even weeks.
Federal regulations (i.e., the FTC Funeral Rule) allow funeral homes to charge a non-declinable service fee that includes charges for their overhead costs. As a practical matter, the mark-up on caskets and other merchandise also covers overhead costs. It is up to the discretion of the funeral home or cemetery how they will allocate their charges between services and merchandise. For example, a funeral home may set its service charges lower than its competitors to appear more attractive to consumers. But it may be necessary for that funeral home to have a higher mark-up on caskets to make up for its lower service charges. Regardless of how a funeral home sets its prices, it must recover its costs and, like all businesses, earn a profit.
Whether funeral costs today are excessive is debatable, there are valid arguments on both sides of the question. Ultimately, the consumer will decide what funeral services and merchandise are worth. And a competitive environment will benefit consumers by bringing prices down. Nonetheless, it is likely that funerals will remain a relatively expensive endeavor. Certainly a cost that merits careful consideration and is best incurred by a knowledgeable consumer.
Third Party Funeral Costs (also known as Cash Advances)
Various products and services are typically provided by parties other than your primary funeral service provider. These are known as Cash Advances.
For your convenience, most Funeral Directors will arrange these items for you and include the total cost on their funeral goods and services statement, most often found on the statement in the section labeled “Cash Advances.” This means the funeral home will write the check to the third party (such as the minister) on your behalf.
Examples of third party services and products are:
- Honorariums/fees for the services of clergy.
- Honorariums/fees to religous organizations for use of their sanctuaries for funeral services.
- Fees for the services of musicians and vocalists.
- Floral arrangements. For more, see Etiquette — Flowers
- Cemetery charges to open and close the grave.
- Food and beverages for luncheons and other receptions.
- Newspaper obituaries. See Writing Obituaries
- Internet memorials.
- Certified copies of death certificates. For information on obtaining copies, see Death Certificates.
It is important to note that funeral homes do not increase the price on anything that is a cash advance, above what the third party requires for payment. They simply include the actual cost of the third party service on the funeral goods and services statement so you do not have to worry about writing multiple checks.
Tip for Managing Funeral Costs
If you want to manage your costs, start with advance funeral planning to get an estimate of your funeral cost. Our Wise Planning System puts you in control of your funeral plans and gives you instant cost estimates. You’ll be guided step-by-step through the process with our easy-to-use planning tools.
The Quick Plan is the first step in the Wise Planning System. In a matter of minutes, you’ll have created a basic funeral plan and will find out your estimated funeral cost. It’s do-it-yourself planning, there’s no obligation. Give it a try!