How to set up an Affordable Cremation Plan: Pre-arrange vs. Pre-pay

Most of us now see cremation as here to stay.  And with the extraordinary experience of the COVID pandemic, more people than ever are considering mortality and the benefits of having a cremation plan.

So, in this guide, we are going to explore the pros and cons of setting up a cremation plan.  We will review what is needed to set up an affordable cremation plan, the likely costs incurred to plan ahead of time, the authorization documentation required, and whether to pre-pay.

What should an affordable Cremation Plan cost?

The cost of cremation prearrangement can be governed by 2 components.  It will vary depending on what services and products you select, and the service provider you chose.  Prices for a cremation service differ, but the cheapest ‘no fuss’ direct cremation plan is the simplest and most affordable cremation plan.  A prearrangement cremation plan is likely to cost anywhere between $1,295 and $3,000.  This is why we discuss planning ahead and accessing at-need low-cost cremation services below.

The DFS Memorials network of affordable cremation providers offers at-need direct cremation services from $595 to $1,395.  It can be helpful to plan ahead by simply knowing who your local low-cost cremation provider is, and what price their direct cremation package is.

Visit your state and city to discover the best price direct cremation near you.

Why Pre-Plan? The benefits of establishing a cremation plan

Firstly, planning ahead offers many benefits.  It gives you time to research cremation options in an objective and reflective mindset.  You can make decisions in your own time, and you are ultimately in control of your wishes.

These days you can easily plan comfortably from your own home with various planning tools offered online.  Alternatively, you may wish to visit a funeral service provider and discuss a cremation plan.

Cremation planningA significant number of cremation service providers now offer their own online arrangement tool on their website where you can enter all the information required to set up a cremation plan.  This is especially so if you are opting for a simple direct cremation plan.

The other major benefit of pre-arranging is that it not only gives you peace of mind, but can save your surviving family the stress of making decisions, and the financial responsibility.

I will explore the 2 options for setting up a cremation plan later in this guide.  As you can pre-plan and pre-pay, or you can opt to pre-plan but not pre-pay, or set up your own Payable-On-Death (P.O.D) bank account.

First, let us look at what you legally need to submit and/or sign to establish a simple cremation plan.

What do you need to set up a cremation plan?

Personal Information to submit to vital records

To set up a simple cremation plan you need to document some basic personal information.  This will be used to help the funeral director obtain the death certificate.  This is details such as your full name, date of birth, legal residence, next of kin, and education.

Selecting a cremation urn or other services

You may wish to make selections for services or products.  You may wish to choose a cremation urn, or specify what you want to happen to your cremated remains.  Even for someone choosing a basic direct cremation plan, it can help your surviving family if you have made clear what your wishes are.  Too often, family disputes can erupt if there is disagreement about what is going to happen with the ashes.

Completing the Cremation Authorization

The most important document to pre-sign is the ‘Cremation Authorization’.  A cremation cannot proceed without this important legal document correctly completed.  If you have not completed and pre-signed to authorize your cremation, your legal next of kin must sign this.

If there are multiple siblings (or complications such as divorce and ‘blended’ families), obtaining all the legal signatures required can prove problematic.  And this has often prevented a cremation from going ahead when it was the individual’s wish.

You can also specify to who your wish your remains to be released.

Arrange a cremation onlineAffordable Cremation Plan prices & understanding Pre-need and At-need cremation costs

There are 2 funeral industry terms that explain cremation service costs – at-need and pre-need.  These terms are self-explanatory but let’s just explore the difference.  Most direct cremation service providers that advertise a low-cost direct cremation are offering their ‘at need’ price.  In the event that you wish to select that provider to plan with, you will find his pre-need price will be higher.  As an example, a cremation provider that offers direct cremation at $695 at need, may offer you a cremation pre-need plan for $1,395.

This is because he has to consider inflation and what his actual direct cremation price may be in years to come.  The majority of direct cremation plans are secured with an insurance product or a funeral trust fund.  Laws pertaining to funeral pre-need vary by state, and it is highly regulated.  There are also other factors such as age and term of payments that can affect the final cost for a cremation plan.

So, it is important to understand that when you see a cheap direct cremation price online at $695, this will not be the same price if you inquire to make pre-arrangements.

Pre-planning without Pre-Paying – how does that work?

Preplanning without pre-paying is about setting out your cremation and funeral wishes, signing the required legal documents, and ensuring your plan is known and shared with your family and a cremation service provider.

A number of funeral homes will provide a service to have your wishes and authorization documented and held on file.  Then, all the family has to do when the time comes is to contact the funeral home.  It can also be useful to have set aside the funds to cover the cost of your cremation plan.

This can be done by establishing a Totten Trust or Payable-on-Death (P.O.D) bank account, and depositing sufficient funds to cover expenses.  You can nominate one or more beneficiaries who can access the P.O.D account upon death and immediately withdraw the funds for the funeral expenses.

This is an easy, safe and free way to pre-plan while keeping your money secure.  Just ensure you have communicated your intentions with your family and kept the paperwork in an easily accessible place for when the time comes.  Visit your bank to find out how to set up a P.O.D. or you can read more about it in our guide What is my best and safest option for putting aside money for a funeral?

Pre-paying a cremation plan:  Can I arrange payment terms?

If you do prefer to set up a cremation plan with a funeral service provider, many do now offer payment terms.  Terms can vary, and you can choose a payment plan, but it is likely that the longer the payment term, your cremation plan will cost a little more.

Affordable cremation plans are often set up this way when supported by an insurance product that offers payment terms.

How a cremation plan can protect your assets

Funeral plans are deemed excludable assets, and therefore putting your funds into a pre-need plan can make it easier for you to qualify for Medicaid benefits.  Many hospice and nursing care facilities encourage having a funeral plan in place as part of their admissions process.  It can help and support all concerned to be clear that a funeral plan is in place when an individual’s health may be deteriorating.

Purchasing a Travel Protection Plan

Another consideration if opting to pre-plan for cremation services is to purchase a Travel Protection Plan if you do travel away from your home residence (as 80% of Americans do).  This inexpensive plan, which costs $450 for lifetime protection, covers ALL cremation expenses should you pass away over 75 miles from your U.S. residence.  Read more about this plan in our guide to What if I Should die while Traveling?

Also, visit our post on Are Cremation Costs Likely to Rise?

I hope this has helped you better understand your options for setting up a Cremation Plan.

You can find out more about cremation costs near you by using the links to select your state and city and learn more about local providers and prices.

Feel free to contact us if you require further assistance with a Cremation Plan, or have further questions.