The New York Times article on funeral planning blurs the line between pre-paying and pre-funding. The savings accounts discussed by the article are one method of pre-funding funeral costs. But the POD savings account is far less secure than final expense trusts or final expense insurance policies. The concern many consumers have is that the ne’er-do-well nephew will spend the funeral funds if they are discovered before the consumer’s death. A final expense product, whether insurance or trust, will offer better protection and investment return than a POD CD. Many funeral homes can offer recommendations about pre-funding alternatives when the consumer is not yet ready to pre-pay and purchase a preneed contract.
The article also suggests that not all funeral homes are ‘sold’ on prepaid funeral contracts. There is a grain of truth to that statement. Investment returns on many preneed funding options are not keeping pace with funeral cost increases. These preneed shortfalls are causing funeral homes to shy away from guaranteed preneed contracts. But it is rare to find a funeral home that does not offer some form of preneed. If non-guaranteed preneed is the only option, we refer consumers back to the advice offered in our first post on the Times article.