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The last thing anyone wants to worry about is how to finance a funeral when a loved one passes away. According to the National Funeral Directors Association (NFDA), the median cost of funerals with a viewing and burial was around $7,848 in 2021, while funerals with cremation cost a median of $6,971. With costs in all sectors continuing to rise, a life insurance policy could become more important than ever. Policies can be purchased in advance to help cover the cost of a funeral and relieve some of the stress on your grieving family.
- According to the National Funeral Directors Association, the average cost of a funeral ranges from $6,971 to $7,848 as of 2021.
- Life insurance could provide your family with financial security and the money needed to pay for your funeral.
- Funeral expenses have increased over time, but recent data shows that average funeral costs are not going up as fast as overall inflation.
How much does the average funeral cost?
There are many fees associated with a funeral, per the Federal Trade Commission (FTC):
- Basic service fee: This is a standard service fee that is associated with a funeral. This covers the cost of planning fees, including any permit and administrative fees.
- Service and merchandise fees: These cover things like transporting, preparing and embalming the body, as well as funeral home fees for the viewing or memorial and any equipment or services required for the graveside service. You will also need to pay for a casket or burial container or the required services needed for cremation or interment.
- Cash advances: These fees are for services that the funeral home may handle for you, such as funeral flowers, clergy and organists. You may pay an added service fee or marked-up price to account for the funeral home’s efforts, but extra fees must be disclosed to you in writing.
The average casket costs a little more than $2,000, while premium caskets made of mahogany, bronze or copper can cost as much as $10,000.
Some buyers purchase a casket independently to avoid third-party markups. However, you will be responsible for shipping the casket to the funeral home, which may be expensive. If you choose cremation, you can avoid the cost of a new casket. Most funeral homes will rent you a casket to use if you plan on holding a viewing or for the funeral as a more cost-effective option if you have other burial plans.
Below are some of the average funeral costs you may incur, according to 2021 data from the NFDA:
- Funeral service fee: $2,300
- Funeral home rental: $450
- Funeral home staff for viewing: $450
- Funeral home staff for ceremony: $515
- Cosmetic services: $275
- Vault: $1,572
- Cremation: $368
- Cremation casket: $1,310
- Embalming: $775
- Urn: $295
- Hearse: $350
- Transportation of remains: $350
- Transportation for the family: $150
- Pamphlets and materials: $183
The FTC provides a funeral pricing checklist to help you navigate the process.
Average funeral costs by state
The average cost of a funeral can vary by state. Every year, the NFDA publishes its General Price List Survey. These are the results of their latest report, which is based on data from 2021:
2021 NFDA average funeral costs by state
Funeral expenses have increased over time, but recent data show that average funeral costs are not going up as fast as overall inflation. However, this could be a temporary disparity, with funeral costs potentially increasing more in the future.
No matter where you live, the cost of cremation tends to be cheaper than a burial, although some locations are certainly more affordable than others. If you live in states like Colorado or Oklahoma, you will pay significantly less than those who live in Kansas or North Dakota.
How to prepare for funeral expenses
For many, death comes without warning, and while loved ones are mourning, they also must face the question of how to pay for such an enormous expense. That is why financial planning is so important before you die. As you are considering how to provide your family with peace of mind, there are a number of ways to prepare for funeral expenses.
Learn more: Does life insurance cover funeral costs?
Life insurance policy
Securing a life insurance policy is one way for you to contribute to your funeral expenses while you are still alive. Depending on the policy, the death benefit (or insurance payout) your beneficiaries receive once you are gone may cover all or some of your funeral costs. With a larger policy, there may even be additional funds left over for your beneficiaries.
There are different types of life insurance policies to help you plan for end-of-life expenses:
- Term life insurance provides coverage for a limited time period at a fixed premium rate.
- Whole life insurance guarantees insurance for your entire life. Premiums are paid up to the maturity date. It also offers additional savings components to beneficiaries.
If you want lifelong coverage and a diverse financial portfolio, whole life insurance may be good for you. However, it can be pricey and a big commitment.
Final expense insurance
Final expense insurance can also be used to cover funeral expenses. Beneficiaries can use the payout for other costs as well, such as medical and legal fees. Elderly individuals may find final expense insurance the most attractive way to offset funeral expenses as this type of insurance is typically better available to older people. However, it does cost more for the benefit received since a payout is much more likely, and coverage limits are typically capped at a relatively low number.
Other ways to pay for funeral expenses
Along with life insurance, there are a number of ways to prepare for funeral expenses.
Traditional savings account
You can always use a traditional savings account for funeral costs. The advantage of a savings account is that the money will be kept safe and generally accessible. However, probate can cause delays, so whoever is paying for the funeral may have to pay for the funeral through other means until the deceased’s assets are evaluated.
A payable-on-death (POD) account can be a better bet than a traditional savings account. This allows you to set up a special funeral savings account. You appoint the person you want to control the funds after you die, and that person can then access those funds simply by showing a valid death certificate. Funds can be accessed immediately when the beneficiary shows the death certificate, and the account does not need to go through probate.
Military burial benefits
Military members are eligible for special burial benefits, while others may opt for a bank loan or prepaid plan through their chosen funeral home.
You can also look into military benefits such as the death gratuity program. This program pays up to $100,000, which is tax-free, for those who die on active duty or while serving certain statuses on reserve. There is also a burial allowance benefit of $300 for a death that is not related to service and of $2,000 for a service-connected death.
A will is another way to prepare in advance for death. The will can designate how your funeral should be conducted and information about how to pay for funeral services.
The will can also designate certain assets that you may leave behind so they go to the right people. You can even state in your will that you would like to have one of your assets sold by a specific person in your family to pay for your funeral expenses.
How to keep funeral costs affordable
Even if you have undergone financial planning or purchased life insurance to cover your funeral costs, it is important to still consider what expenses are worth the price. If you feel that there are other expenses that will take priority over an extravagant memorial service once you are gone, you may want to consider how to keep these expenses low and let your family know about your wishes.
Below are some strategies that may help keep funeral costs affordable:
- Shop around for the best price. Just like with anything else in life, shopping around can help you save money in the long run because not all funeral homes will charge the same amount.
- Choose cremation and provide your own urn. Although cremation costs are typically cheaper than embalming and burial and are therefore a great cost-saving alternative, purchasing or obtaining a container to use as an urn ahead of time can save you a few hundred dollars.
- Consider donating your body. In the name of advancing healthcare technology and scientific research, some medical schools will cover expenses related to acquiring your body after you die for the use of medical research. It could be a great way to help scientists understand the impact of various diseases and conditions on the human body.
Frequently asked questions
The average funeral cost for a viewing and burial is $7,848, but this is dependent on many factors that can impact the price. Funeral home fees, staff and services can vary widely depending on where you live, so you may want to research your options before choosing a specific funeral home or service.
Funerals with cremations are typically more affordable than burials, costing $6,971 on average. There may be additional services that you require, however, including funeral home staff and service fees.
Choosing cremation, providing the urn and forgoing a funeral service is typically the cheapest funeral option. For more traditional funerals, many funeral homes mark up optional services — like funeral flowers or organists — to account for time and labor. You can avoid these unnecessary costs if you cut out the middleman and try to do as much as you can yourself. Consider appointing a team of friends or family members who can help to save on costs.
The Funeral Rule is a policy that protects consumers by ensuring they only have to pay for the services they want. In other words, you do not have to select a burial package with additional services that you do not want to use. Enforced by the Federal Trade Commission, this rule also means that prices must be clearly provided and that you can use third-party services as you see fit. Once all of the desired funeral options have been selected, a funeral home must provide a final itemized list with prices for you or your family to sign off on before moving forward.