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Funeral Costs to Consider and How to Pay for Them

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Experiencing the loss of a loved one is difficult enough without having to deal with the logistics and costs of arranging a funeral. The National Funeral Directors Association (NFDA) reports that the median cost of a funeral with a viewing and a burial in 2017 was $7,360. This, however, doesn’t account for all of the expenses associated with putting your loved one to rest.

Whether you’re facing an unexpected loss or are planning ahead for the future, it’s helpful to be aware of the funeral costs you or your family can expect and your options for how to pay for them, from getting a personal loan to splitting the costs with your family members.

13 funeral costs to consider

The actual funeral service is just one of many parts of honoring your loved one’s memory through a “traditional” service. You’ll encounter a basic services fee for a funeral director’s assistance with making arrangements, filing necessary documents and enlisting staff support during your requested services. There are also added expenses for items such as a casket, grave marker, printed memorial goods, floral arrangements, burial plots and obituary notices.

Generally, payment for funeral arrangements is required upfront, as soon as you finalize the service details you want. If you or your family are not financially able to pay a lump sum, talk to the funeral director about the payment plan options available if you need to make installments.

Below is a list of common funeral costs you might come across. Note that your final cost might be higher or lower than these figures, based on your preferred funeral choices and location.

The FTC “Funeral Rule”

In the midst of an emotionally challenging time, the stress of making financial decisions can be overwhelming. To help you maintain access to fair funeral planning, the FTC “Funeral Rule” was enacted so that you can avoid the pressure of buying goods and services you don’t want or need.

Under the rule, you have the right to:

  • À la carte goods and services.
  • Pricing information provided over the phone without sharing your personal information.
  • An itemized general price list for all goods and services the funeral home offers, when you visit.
  • Price lists for casket and outer burial containers before seeing samples on display.
  • An itemized statement of all goods and services you’ve chosen, before you pay.
  • A written statement from the funeral home explaining cemetery requirements that incur an additional cost.
  • The option to use an “alternative container” (other than a casket) for cremation.
  • The choice to decline embalming services.

Knowing your rights when making funeral arrangements helps you keep an eye out for low-cost goods and services that the funeral home might otherwise not put on display. This, in turn, helps you avoid spending beyond your budget on unnecessary extras.

Is a burial or cremation more affordable?

The difference between burial expenses and cremation is significant, with the latter potentially saving you a thousand dollars or more. According to the NFDA, the median cost of a viewing and cremation services in 2017 was $6,260, compared to $7,360 for a funeral with a viewing and a burial.

Like a burial-based funeral service, this estimate includes some of the same costs such as:

  • Basic services fee
  • Transportation of the body to the funeral home
  • Embalming
  • Preparation of the body
  • Funeral home facilities and staff
  • Memorial printing

However, instead of the funeral costs, like a casket or burial vault, it includes the cremation fee, cremation casket for the embalmed body (should you want to hold a viewing) and an urn. Additionally, the estimated cost to cremate your loved one doesn’t include other cash-advance items, like floral arrangements or service officiants.

Who is responsible for covering funeral costs?

Carrying the burden of a $7,000-or-more funeral service is a lot to ask of surviving relatives, especially as they grieve. Fortunately, the deceased’s estate is typically responsible for paying funeral costs.

Your loved one might have set aside funeral funds before their passing, or the money might come from a checking account or savings account, investments or other assets. Laws vary by state, but in general, the executor of the estate will disburse funds to cover the funeral service.

However, if the deceased left no money behind in the estate, surviving family might have to find an alternative way to pay for funeral costs.

Are funeral expenses tax deductible?

If you paid out of pocket for a funeral, legally you’re unable to claim the deduction on your individual tax return.

However, if funds from an estate were used for funeral services, the estate can claim the tax deduction to lower its taxable income. Since many estates are less than the taxable amount, estates don’t use this deduction often, though.

If you’re an executor of an estate that owes taxes, you’ll need to complete the United States Estate (and Generation Skipping Transfer) Tax Return, also known as Form 706, and fill out Schedule J to itemize funeral expenses paid by the estate.

5 ways to pay for a funeral

  1. Personal loans
  2. Life insurance death benefit
  3. Social Security death benefit
  4. Veteran burial
  5. Split the cost between family members

1. Personal loans

A personal loan can be used for any purchase, including funeral expenses. Generally, personal loans are unsecured loans, meaning you’re not required to provide collateral to secure the loan. However, when it comes to a personal loan, the loan amount and interest rate you’re approved for will depend on your creditworthiness.

Once you’ve accepted the loan, you’ll receive a lump sum for the amount you borrow and will repay the loan, plus interest, over a fixed term. An example of repayment terms might be two years or as long as five years.

When considering this option, compare multiple personal loan offers to see where you can find the most competitive rates and terms.

Pros

  • You’ll get funds quickly, sometimes within a few days.
  • The interest rate might be lower than your credit card rate.
  • Installment payments let you repay the loan over time.

Cons

  • You need good credit to get the best rates.
  • You might pay origination fees.
  • You’re taking on additional debt.

2. Life insurance death benefit

The death benefit from your loved one’s life insurance policy can be used to pay for anything, whether it’s to sustain the surviving family’s quality of life or to finance funeral costs.

Benefit payment amounts depend on the life insurance policy amount that was chosen by the decedent. Only the named beneficiary on the policy can claim the benefit, and insurers don’t automatically release funds after your loved one passes. The beneficiary must file a claim for the benefit payment. It sometimes takes one week to receive payment or up to 60 days for longer review periods.

Pros

  • The decedent’s policy pays for funeral costs.
  • You have no extra debt under your name.

Cons

  • Receiving the payment might take time.
  • If you’re not a beneficiary on the policy, you can’t claim the benefit.

3. Social Security death benefit

Although the Social Security death benefit won’t cover 100% of funeral costs, every dollar helps. If your loved one qualified for Social Security benefits before passing, you might be able to claim the Social Security death benefit.

Eligible family members may receive a one-time Social Security death benefit payment of $255. Spouses are first in line to receive the benefit. If your spouse passed away and you’d been living with them, you may be eligible for the Social Security death benefit. Similarly, if you lived apart from your deceased spouse but received certain Social Security benefits of theirs, you may also be eligible for the benefit.

If your loved one passed away without a spouse, their child may be eligible to receive the death benefit if the child was on the deceased’s record in the month of their passing.

Pros

  • The extra cash helps chip away at greater funeral costs.
  • It’s a benefit that your loved one earned.

Cons

  • The benefit doesn’t cover a majority of expenses.
  • Only certain surviving family members are eligible to claim the benefit.

4. Veteran burial

Veterans, servicemembers and their families may receive burial benefits free of charge. To be eligible, the decedent must meet one of the following requirements:

  • Had an honorable discharge status upon leaving the military
  • Died while on active duty or on active or inactive duty for training
  • Is the spouse or child of a veteran
  • Is an unmarried, adult dependent child of a veteran

The government will pay for a memorial service and burial in any national cemetery, if your loved one qualifies. Benefit amounts vary depending on whether the death was service-related or not, and where the decedent passed away. Learn more at the U.S. Department of Veterans Affairs website.

Pros

  • It covers many basic funeral costs.
  • Benefit extends to immediate surviving family.
  • It offers special honors or memorial items for funeral service.

Cons

  • Decedent must be a veteran, servicemember or spouse or child of a veteran.
  • The benefit is limited to a national cemetery.

5. Split the cost between family members

To help alleviate the financial burden of paying for all of your loved one’s funeral expenses, consider asking other close family members to contribute. Of course, there’s no guarantee that they will be able or willing to offer financial support.

Pros

  • It helps spread the financial responsibility across multiple people.
  • It may expedite collection of funds.

Cons

  • You might still pay for a significant portion of funeral costs.
  • Financial contributors may have opposing funeral preferences.
  • As with all shared financial costs, relationships may be compromised.

Although losing someone is always tough to face, it doesn’t have to be financially stressful. Lean on the many options to finance your loved one’s funeral costs so that you can focus on celebrating their life with family and friends.

 

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