When I go to the mall to buy a dress, the clerk never allows me to walk out of the store without paying for my selection. The merchant has invested his resources in providing an appropriate place for me to shop, the employees to assist me while I shop, and items from which to shop. That is the extent of their investment before they must realize a return of funds and a profit. I, of course, have a choice. Upon selection, I can pay for the item with funds I have set aside for the purchase of things I need or want, or I can enact my established credit and charge the item. The point is that the merchant must be paid before I walk out with his merchandise. Payment for selected merchandise transfers ownership from the merchant to me. If I charge the item, my credit card company assumes an unsecured debt risk and therefore charges interest for their trouble.
The same holds true for the funeral home. My funeral home of choice will provide an appropriate place to hold a funeral, employees to assist in accomplishing a proper funeral and goods and services that will provide dignity and respect for the loss of life. Like the mall store, that is the extent of how far the funeral home's investment reaches before they must realize a return of funds and a profit. Again, I have choices. Either I can pay for my choices with funds I have set aside, which would include cash, life insurance policies and pre-needs, or I can finance the selected funeral items by enacting my established credit. I have two credit choices; I can utilize either my credit cards or the services of a different company, a finance company. Like the credit company, a finance company assumes an unsecured risk and charges interest for their trouble.
Pre-paying for a funeral works in the same manner as setting funds aside for the purchase of a dress at the mall. Each month, one will deposit funds into an insurance policy that has been established for the funeral services they have pre-selected. It works exactly like a savings account, only better. If one fails to pay completely for his or her selected services before he or she dies, the insurance company will pay for his or her funeral in full. Assuming that the insured has been honest with their qualification status from the beginning. Of course, the insurance company like the credit company will add fees for their assumed risk.
Why then should one purchase funeral insurance if either way, he or she is going to pay fees to cover assumed risk? One should purchase funeral insurance to protect their loved ones from the unnecessary financial burden and stress of paying for a funeral when they are in a vulnerable state of grief. At such a time families may be easily deceived, victimized into unnecessary expenditures or pressured into making decisions that they would not have made had they been better prepared. Decisions such as relinquishing their home or abandoning aspirations of higher education. The point is that if your loved ones are busy covering your expenses, they may not be able to cover their own.
My name is Tracy Renee Lee. I am a funeral director, author and freelance writer. I write books, weekly articles and brief tips on understanding and coping with grief. It is my life's work to comfort the bereaved and help them live on.