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My husband (age 55) is disabled. I currently have a term life insurance policy on him where I work for a nominal cost. We will be retiring to Florida within the year and that policy ends when I retire and with him being disabled I will not be able to get him affordable life insurance coverage. I am considering starting a pre-paid funeral fund to use instead. What are the advantages and disadvantages of such a fund? Or would it be better to just put money into a savings account every month and transfer it to a prepaid funeral fund at a later date?

It may well be different in the US than here in Canada.

Me step Dad prepaid for his cremation about 10 years before his death (2 years ago). He paid about $1400. When he died the cost of what he had paid for was $1000 more than he paid, but the family did not have to cough up any extra cash. That was a far better return than we could have gotten in an investment.
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Reply to Tothill
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You will know the right thing to do at the time when you are ready to make the decision, but want to share what we know. We learned that the cost of the funeral is "locked-in" once it is pre-paid, at least it is at our local funeral home, and is also transferable. So, we decided it would be an advantage to set up a pre-paid funeral for our 94 yr old mother, which is in a form of a life insurance policy for a certain amount of money. The cost is very high at funeral homes and it seems like it would likely be higher in years to come. In addition to this, if she were to go into a nursing home or long-term care facility her savings would have been automatically applied to her care. One other thought, if the term-life insurance policy has a cash value it may be helpful to cash it in before it gets cancelled. I hope this helps and will keep you in my prayers.
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Reply to 2ndMiddleChild
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I did prepaid funerals for both my folks when they went into assisted living. They were mid 80s at the time. In my case the funeral home sells you an insurance policy that covers the services you have chosen. Many funeral homes are similar to dealing with car dealers, trying to up sell you on each and every item. Don’t fall for it.

Mom died just a few months after moving to assisted living. It was a godsend to not have to deal with the details of all the funeral arrangements.

I moved dad near me after mom died and found that I could transfer the insurance policy to a funeral home here. This place was very nice, no hard sell. Dad died in sept and was cremated. I’ll take his ashes home next spring. Cremation was much cheaper than the original funeral plan so I was able to get a sizable refund from the insurance company paid to dads estate.
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Reply to Windyridge
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I saw no disadvantage. Because of Medicaid I had to cash in two of Moms small policies back in 2017. I then went to the funeral director and had it put in a trust. At that time, I planned her funeral. Since the director had done Dads, I went with the same casket. Discussed the viewing and the service. When she passed a few months later, all I had to do was order flowers and have a luncheon catered.

I may wait until after you retire and move to set something up. The one question I would ask is if a funeral Trust can be set up and payments made to it? Not sure how you would "set money aside for that purpose". Because if you will ever need Medicaid for DHs care, you would need to prove that money was for funeral costs. Not sure if banks set up those types of accts.
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Reply to JoAnn29
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Find out what funerals cost now, and just put money aside for that purpose. I see no use in giving someone in the funeral business the use of your money when you could have it working for you instead.

My dad died two years ago in California. We had him cremated ($2600) and the niche that will hold both him and my mother was $5800 (nameplate included). I've since found that cremation prices vary quite a bit, and I could probably have the same service for my mom for about $1900.

To save money, I have yet to put my dad's ashes in the niche, because the cemetery charges $595 every time we open it. We're waiting until my mom passes and will put them both in at the same time.

So, I'd say that if you budget $10K, you'll be fine for a cremation. Put that in an investment, and you'll grow that money instead of letting the funeral folks put it in their investments instead.
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Reply to MJ1929
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