Prepaid Funerals: A Grave Error?

In 1973, 49-year-old Evie Robinson of McComb, Mississippi, bought a prepaid full-burial policy from the local Hartman Funeral Home. But by the time she passed away in 2008, at age 84, the policy had gone missing; unaware it existed, Robinson's family paid Hartman $8,128 to lay their mother to rest. They later found the policy among her possessions. Evie's daughter, Johnnye Denman, presented the document to the funeral home and asked for a refund. Too late, they said. So Denman contacted On Your Side.

See also: When online checks disappear.

Modern life insurance and burial policies generally don't have expiration dates on payouts. Some older policies may have "redemption clauses" requiring a claim within a certain period (Robinson's read 30 days), but such restrictions are rarely binding.

Hartman funeral director Gene Sharkey didn't return my phone messages, so I called Arthur W. "Bubba" Lang, past president of the state association of funeral directors. He persuaded Sharkey to refund $4,370 in service fees but couldn't budge him on the hard costs (like the casket). I then contacted the underwriter of the policy, Madison National Life in Wisconsin, which agreed to cover the full remaining fee of $3,758.

Funerals can be expensive — especially if you pay twice. — Illustration by Paul Moser/photograph by Getty Images

The average price of a burial with vault is about $8,000, according to the National Funeral Directors Association. But Josh Slocum, executive director of the Funeral Consumers Alliance and coauthor of Final Rights: Reclaiming the American Way of Death, doesn't recommend purchasing a prepaid funeral plan: "Some prepaid plans can actually cost you more in payments over time than the amount they'll pay out on your funeral," he says. Instead, set up a "payable upon death" bank account. It will earn interest, be available for an emergency, and still provide financial support to your family when you pass away.

Most important: Talk to your spouse and children about funeral plans. "Avoiding the topic won't stave off death," he says, "but it will make the funeral more difficult, and likely more expensive, for survivors."

Ron Burley is the author of Unscrewed: The Consumer's Guide to Getting What You Paid For.

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