Losing a loved one is a traumatic experience, and it can also be extremely stressful if you can’t afford to pay for the funeral. Most funeral homes expect upfront payment and many families often have difficulties finding enough money to pay for burial expenses in such a short time period.
This article offers some helpful and creative solutions to pay for a funeral with little or no money.
Choose an Affordable Funeral Plan
The average funeral service price is almost $8,000 (not including cemetery fees), so choosing an inexpensive option makes financial sense. Planning a cheap funeral doesn’t mean you don’t care about your loved one – a simple and affordable funeral is still a dignified and respectful way to celebrate the life of a loved one.
Also known as simple or low-cost cremation, a direct cremation occurs when the body is cremated immediately after death without a funeral service. The cremated ashes are returned to the family for final disposition. Direct cremation costs can range from roughly $600-$3,000, depending on the location and any supplementary services.
A direct burial is similar to a direct cremation in that a formal funeral service isn’t held beforehand. The deceased person is buried immediately after death, making direct burial less expensive than traditional funeral options. However, the total price may increase if the family holds a graveside service or opts for a higher-end casket.
A home funeral occurs when a family keeps their loved one at home instead of sending the body to a funeral home or crematory. Home funerals give family members the chance to spend more time with their loved one and take care of them privately, reducing the need to pay for funeral home services.
Some states have certain restrictions regarding home funerals, so make sure you understand the legal requirements in your area before making any final arrangements.
Donating your body to science basically eliminates funeral and burial expenses. Educational institutions (and other organizations that accept such donations) will cover the cost of cremation and return the deceased’s cremated remains back to the family free of charge. This usually occurs within two to three years.
This free funeral option is perfect for those who wish to make a difference by contributing to scientific exploration and medical research.
Pay in Advance
Advanced planning for end-of-life expenses can relieve the financial burden of funeral and cremation costs. Pre-planning a funeral also provides the opportunity to document your final wishes and choose from a variety of insurance products geared towards making final expense payments.
Burial insurance is used to pay funeral and burial costs of the insured person after death. A policy like this sets aside a fixed amount of money to cover funeral expenses, although the designated beneficiary can use the funds to pay for other final expenses (e.g. medical bills, outstanding debts). Most burial insurance policy payouts range between $5,000-$25,000, depending on the insurance company.
Pre-need insurance plans (also known as prepaid funeral plans) are insurance policies offered by funeral homes to cover expenses. A pre-need plan allows you to make funeral arrangements in advance and “lock-in” current prices for whichever burial services and products you select.
Pre-paying for funeral or cremation expenses also protects against inflation, saving you money in the long run.
Just like low-cost burial insurance and pre-need plans, life insurance proceeds can be used to pay funeral and cremation expenses whenever the need arises. Depending on the deceased’s life insurance policy, the beneficiary can also use the funds to pay for other medical and living expenses if necessary.
It’s important to remember that it can take between 30-60 days to receive a payout from the insurance company. This may cause problems when making funeral plans, as most funeral providers require payment at the time of service.
Get External Assistance
If you are having trouble raising funds for a loved one’s funeral, consider asking others for help. In recent years, fundraising campaigns and assistance from local agencies and non-profit organizations have been helpful with funeral expenses.
Many families have successfully paid for their loved one’s burial expenses by creating funeral crowdfunding campaigns. Most crowdfunding sites are free to use but there may be processing fees related to the final amount collected.
If your loved one was a US veteran, contact the nearest Veterans Benefits Administration (VA) office to determine whether military benefits are available for surviving family members. If eligible, surviving spouses and children may receive a tax-free cash payment to cover funeral and burial expenses.
Some employers offer death benefits to their employees which may be passed on to surviving family members. Benefits can include life insurance, accidental death insurance, and pension/ retirement plans. These funds may be used to pay funeral costs.
It’s important to understand the tax implications of using employer subsidies to cover final expenses because only specific funeral and burial expenses are tax-deductible.
Victim Compensation Program
Victim compensation programs can reimburse families for funeral and burial charges if their loved one died from violent crime. Compensation is available even when no one is arrested or convicted for the crime. Each state operates a victim compensation program and reimbursement amounts can range from $10,000 to $100,000.
After the Funeral
It’s important to remember that making funeral or cremation arrangements and paying for these expenses is only the first step. There are other legal, financial, and tax matters to resolve afterward. Discover everything you need to know about post-funeral paperwork here.Back to Knowledge Center