Real Life | Planning for funerals is part of life

Dying is a regular part of living, and because nobody yet has told us how to avoid it, we need to think about and plan for it, just like everything else. And recalling that we all know our date of births, but not our date of deaths, we’d better get on with our dialogue.

More of my thoughts, to add to yours:

What about those pre-paid, “pre-need” funeral and burial plans?

They’re prepaid fixed-price contracts, specifying guaranteed at-death funeral company and cemetery/crematory services and facilities to be furnished at time of death but preselected at the time of purchase. They can be desirable “win-win-win” arrangements for us, for Loved One and for the vendors, if the elements are analytically selected and are right for both the present and anticipated future circumstances.

In most states, consumer protection laws protect us. Typically, the contracts are trusteed, to survive a provider’s evaporation or misappropriation. Funds are escrowed, insured bank CDs. The cost of contracted items not used at time of death is refundable, or transferable to other, nonprearranged items at prices in effect at time of pre-payment. Unless “irrevocable,” to qualify the client for Medicaid, Veterans Administration and other entitlements, the client can revoke the entire agreement for a full refund.

Certainly, it would be wise to check for these protections in any prepayment arrangement and to have all of them in writing.

Some providers also offer plans to cover the cost of being retrieved and shipped home in case of out-of-town death. And, of course, copies of all the contractual documents should go into the person’s “doomsday manual.”

There are advantages:

And, yes, there can be disadvantages, too:

So, what about alternative plans?:

Life’s miracle financial tool:

Life insurance can do more for us than we might think. If one is young enough and favorably insurable, or already insured, well-chosen and well-managed life insurance almost always is the least-cost, long-term funding. In “normal” economic times (if ever “normal” occurs!), successful investments, by themselves or together with life insurance, might be expected to grow over time, to cover price inflation.

Caution: Conventional life insurance is absolutely reliable but not always an adequate inflation hedge. Variable life can be and has some guarantees. But, of course, a guaranteed alternative investment isn’t productive, and nonguaranteed is long-run risky. Further, it takes a lot of self-discipline to maintain and fund adequately a voluntary, discretionary plan over decades of time — druthers like vacations, new cars and children’s college bills often win.

Some create a life insurance solution at the beginning and gradually reduce it over time if and when earmarked investments grow sufficiently to cover the need.

Many of us have excess life insurance no longer needed for family or business purposes. It can become the least painful way to fund all kinds of “final expenses,” including prepaids, in the estate plan. Policy ownerships and the beneficiaries can become, or can be transferred to, the providers or to trusts, or benefits can be collaterally or absolutely assigned.

By insuring the cost, the client doesn’t have to give up any precious cash. Nor must we sacrifice many years’ (hopefully!) future yields by liquidating investments. And our heirs will remind us that their full inheritance remains intact.

If necessary, policies requiring continuing premiums can be changed to “reduced paid-up” status. Or, payable future premiums still are a lot cheaper than the burden of having to pay out the entire prearrangement contract price in cash and in advance, especially if those premiums can be reduced by crediting future dividends to them.

Three more ideas:

Would the folks at the funeral or memorial service be inspired by the person’s favorite verses and musical pieces, and by excerpts from the memoirs and ethical will?

Children grieve, too, and they struggle with the burdens of groping to understand death and trying to express their feelings. A marvelous free children’s help kit is yours at www.sesamestreet.org/grief.

We can be uninhibited with funeral directors. They’ve metamorphosed into compassionate, smiling humans, just like us.

Now, after all this, let’s close upbeat: Grandpa would exclaim; “L’chaim! To life!”

This story was originally published January 24, 2015 at 12:00 AM with the headline "Real Life | Planning for funerals is part of life."