Pre-Need Arrangements

Pre-need funeral arrangements are the practice of organizing and paying for funerals prior to death, and usually while the purchaser is in (relatively) good health. A term used interchangeably with pre-pay funerals, pre-need arrangements are part of a wider expansion of consumer choice and individual empowerment in bereavement services. Comparable practice can be found in the development of living wills and patient-centered end-of-life decision making. As a source of income generation, they also form part of a broader commercialization and commodification of the funeral directing industry, whereby funeral providers have become increasingly entrepreneurial and consumer oriented.

Profiling Pre-Need Planning

Not much is known about those who purchase pre-need plans, but research evidence suggests that those who purchase pre-need arrangements tend to be older, more educated, and more religious than [Page 818]those who do not. It was estimated in 2003 that over a third of all American funerals had been paid for, at least in part, in advance.

While there remains much to be learned about the uptake of pre-need arrangements, much more is known about the business features of pre-need arrangements. In their summary of pre-need arrangements in 1995, Mercedes Bern-Klug, Stanley DeViney, and David Ekerdt found that the cost of pre-need arrangement in the United States ranged enormously, between $195 and $14,000. Such disparity in cost they attributed to the varying fees charged for body disposition—burial, in particular, tends to be more costly than cremation. This range of charges for pre-need arrangements indicates that they are a profitable source of income for plan providers.

As a tangible example of a growing commercialization of death, there are concerns about how pre-need arrangements are regulated and monitored, and the extent to which funeral guarantees are upheld. On the other hand, however, proponents of pre-need argue that they offer choice and flexibility, and enable the individual to leave specific instructions as to what they want to happen after they have died.

Often marketed as providing “peace of mind” in offering the consumer reassurance that provision will be made for their funeral costs and that their wishes will be adhered to, the origins of preneed arrangements can be found in formal state funerals, in which the funeral was arranged, usually with the agreement of the figurehead, prior to his or her death. The idea that a funeral is paid for before the individual has died also bears similarities to 19th-century burial clubs in North America and the United Kingdom, where individuals paid a weekly fee to cover the cost of their funeral and burial. Pre-need arrangements became popular toward the end of the 20th century as large conglomerate companies began purchasing and operating funeral director chains, and recognized that pre-need arrangement plans not only were feasible in their provision but also were an ongoing and reliable source of income.

Pre-Need Option Payment Plans

According to the National Funeral Directors Association in the United States, there are three ways of arranging and paying for a pre-need funeral plan. First is the option of paying into a trust fund, which is usually arranged through a funeral director, a cemetery, or a private company. In this option, a percentage of the money invested is set aside for the cost of the funeral itself and the remainder becomes available for the use of the trustee at his or her discretion. The second option for a pre-need arrangement is available through insurance companies in the form of an insurance policy. These policies cover the cost of the funeral in the event of the policyholder's death. The third option for pre-need is setting up a savings fund for the explicit purpose of paying for a funeral, which is also referred to as an account payable on death, or POD.

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