Are Prepaid Funerals Worth It?

Posted on June 21st, 2025 by Southern Estate Lawyers

When most people think about estate planning, they imagine creating a will and preserving assets for their loved ones. But what about funeral planning? Planning and paying for your funeral ahead of time may help take additional stress off of already grieving loved ones. Are prepaid funerals worth it?

Prepaid funerals allow you to make and pay for funeral arrangements ahead of time. They can simplify things for your loved ones after your death — but they aren’t without risks.

How Do Prepaid Funerals Work in Alabama?

Arranging a prepaid funeral is a lot like planning a funeral for someone else. You can choose everything from your burial plot to the type of flowers you want at your memorial service. While the exact options available may vary slightly based on the funeral home, you can usually choose options like these:

Whether you want to be buried or cremated
Your casket or urn
Your burial plot
Your headstone
The type of memorial service you’d like
Flowers, music, and other elements of your memorial service.

In Alabama, there are four ways to fund a prepaid funeral:

Your life insurance policy
A trust
A security bond
A letter of credit.

If you’re interested in a prepaid funeral but aren’t sure which method of payment is best, an estate planning lawyer can help you decide.

If you choose a prepaid funeral, don’t forget to tell a trusted family member about your plans. You should also update your will to include them. If you die unexpectedly and your family doesn’t know you’ve already made arrangements, they might end up paying for a funeral service and burial elsewhere.

Advantages of Prepaid Funerals

Take the Guesswork Out of Funeral Planning

For many people, the idea of having an established funeral plan is appealing. Prepaid funerals come with many advantages:

You Can Lock in the Price

Between inflation and the ever-increasing prices of nearly everything, this advantage is a compelling one. Most of the time, when you pay for a funeral now, you’re locked into today’s pricing.

For example, suppose that you arrange a prepaid funeral for $5,000. At the time of your death, several years later, the cost of a funeral has risen to $7,000 — but because you paid years ago, your family won’t be liable for the additional $2,000.

However, it’s important to note that some funeral homes may not factor inflation into their rates. These funeral homes may charge your family members an additional fee if prices rise. Before you commit to any prepaid plan, you should make sure the price you’re paying is fixed.

You Can Choose Your Final Resting Place

For many people, being able to select a burial plot or spot in a mausoleum is important. If you specify where you want to be buried in your will, you’re still depending on your family members to honor your wishes. However, when you prepay for a funeral and burial, you can take that uncertainty out of the equation.

Is a prepaid funeral right for you? You don’t have to make this critical decision alone. Call Southern Estate Lawyers at (251) 444-7000 to book your consultation today.

You Can Simplify the Planning Process for Your Loved Ones

For many people who choose prepaid funerals, this is a key advantage. You know that your family will be grieving after your death, and if you don’t have a plan in place, they will be tasked with finding a funeral home, planning a service, and selecting a burial plot. They also may need to come up with the funds themselves, especially if your assets are tied up in probate.

Thinking ahead to your death can be uncomfortable. However, if you’re willing to create a plan and pay ahead of time, you can save your loved ones the emotional, logistical, and financial stress of planning your funeral and burial.

Disadvantages of Prepaid Funerals

Paying Ahead Might Give You Peace of Mind, but It’s Not Risk-Free

The Alabama Board of Funeral Services regulates prepaid funerals to ensure providers are transparent about their policies and that each client’s funds are secure. Regulation lessens your risk of running into problems down the line, but it can’t completely erase the possible downsides of prepaid funerals:

You’re Tied to a Specific Funeral Home

When you create and pay for your funeral ahead of time, you might have no intention of ever leaving Alabama. However, life circumstances can change suddenly. If you do decide to move elsewhere, you likely can’t transfer to a different funeral home or get your money back.

You Can’t Access Your Prepaid Funds

Right now, paying ahead for your funeral might be financially feasible. But what happens if you unexpectedly fall ill and have astronomical medical bills to pay? Paying for a funeral ahead of time eliminates the challenge of having to make last-minute funeral plans. However, if you or your family must cover unexpected medical bills, being unable to access those funds might cause additional stress.

The Funeral Home Could Go Out of Business

Even a well-established, reputable funeral home might encounter unexpected financial issues in the years (or decades) between now and your death. Ideally, you should be able to get your money back if this happens. However, the process of getting a refund is rarely easy — and there’s always a chance you won’t get your money back at all.