A pre-planned cremation costs about what a cremation costs today, because that is what most plans are: today's price paid in advance. A prepaid direct cremation through a funeral home or an online provider typically runs $1,095 to $3,500 depending on the state and the provider, close to the national median direct cremation price of about $2,200. A membership plan costs around $14 a month instead. Setting money aside in a payable-on-death account costs nothing. The three routes differ far more in what they guarantee than in what they cost, and that is where this guide spends its time.
Three ways to plan ahead for a cremation
| Prepaid plan | Membership plan | Payable-on-death account | |
|---|---|---|---|
| What you pay now | Full price, or installments, typically $1,095 to $3,500 for direct cremation | About $14 a month or $120 a year | Whatever you choose to deposit |
| What is fixed | The price of the listed services, if the contract is guaranteed | A set benefit after a waiting period | Nothing |
| Tied to a provider | Yes, one funeral home or one network | Yes, the membership's network | No |
| Money back if plans change | Depends on revocable or irrevocable status and state law | Usually no refund of fees paid | Yes, it is your account |
| Counts against Medicaid | Not if irrevocable, within state limits | Generally not an asset | Yes, it is an asset |
Prepaid cremation plans
A prepaid plan is a pre-need contract. You choose a funeral home or an online provider, pick the cremation package, and pay now for services to be delivered later. Online providers such as After.com sell direct cremation this way, with prices published in advance and the arrangement made on a website. Local funeral homes sell the same thing across a desk. Our article on pre-planning cremation online looks at how the online route works.
What is guaranteed
In a guaranteed contract, the funeral home commits to providing the listed services at the agreed price no matter how its prices rise. That is the main reason to prepay. In a non-guaranteed contract, the money is a deposit toward future prices, and the family pays any difference. Ask which kind you are signing. Ask which items are guaranteed, because some contracts guarantee the funeral home's own services but not third-party charges.
What is usually not guaranteed
Third-party costs. Death certificate fees set by the state, medical examiner or permit fees, and the crematory's charge if the funeral home does not own its crematory. These are often listed as cash advance items and billed at the time of need at whatever they cost then. Read that section of the contract before signing.
Where the money goes
Every state regulates prepaid funeral money, and the rules vary. Most require the funeral home to place all or a large share of the payment into a trust or to fund it with an insurance policy, so the money survives if the funeral home closes or is sold. The share that must be trusted, the reporting rules, and the refund rights differ from state to state, and this site does not try to summarize fifty sets of rules in one line. Ask the provider where the money will be held, in which bank or insurer, and what the refund terms are if you cancel or move. Then confirm with your state's funeral board. Our walkthrough of prepayment plans covers trusts, insurance funding, and the revocable versus irrevocable choice in detail.
The moving problem
A prepaid plan is tied to a provider. If you retire from Ohio to Arizona, a contract with an Ohio funeral home may be worth only what can be transferred, and the transfer terms are in the contract. National providers and chains handle this better than a single-location funeral home. Ask before signing.
Membership plans
A membership plan is a newer model. You pay a small monthly or annual fee and, after a waiting period, the plan covers a basic direct cremation through its network for a fixed benefit. Cremation Club is the best-known example, at about $14 a month or $120 a year, with the benefit available after 12 months of membership across most of the continental United States. The appeal is the low monthly cost and the freedom from committing thousands of dollars to one funeral home.
The trade-offs are real. The fees paid are not refundable. If you stop paying, the coverage stops. The waiting period means the plan does not help in the first year. And the benefit covers a basic direct cremation only, not a service, not an urn beyond the simple container, and not the death certificates. For someone in good health who wants a simple cremation handled without a large upfront payment, it is worth understanding. For someone with a short life expectancy, the waiting period matters.
Payable-on-death account
The simplest route is to open a bank account in your own name, name a trusted person as the payable-on-death beneficiary, and put in what a cremation costs plus a margin. The money stays yours. On your death it passes to the beneficiary directly, outside probate, and they use it for whatever arrangements they choose with whichever provider they choose. Nothing is guaranteed against price rises, but the account earns interest, and the beneficiary can shop for the best price on the day.
The main drawback is Medicaid. A payable-on-death account is an ordinary asset. If long-term care and a Medicaid application are likely, an irrevocable prepaid contract shields the money within state limits and the account does not. Talk to an elder-law attorney before choosing on that basis.
Which route fits which family
- A person likely to need Medicaid for nursing care: an irrevocable prepaid plan, structured with legal advice.
- A person who wants everything settled and expects to stay put: a guaranteed prepaid plan with a funeral home they trust, after reading where the money is held.
- A person who may move, or who wants the family to shop on the day: a payable-on-death account plus written wishes.
- A healthy person who wants a low-cost safety net and no lump sum: a membership plan, with the waiting period understood.
Whichever route you choose, write down your wishes and tell the person who will act on them. Our pre-planning guide covers what to record. And compare providers before committing. Our cremation services comparison lays out the national providers and where each operates.
Questions families ask
What is the average cost of a pre-planned cremation?
Prepaid direct cremation typically runs $1,095 to $3,500 depending on the state and provider, close to the national median of about $2,200 for a direct cremation bought at the time of need.
Is prepaid cremation money safe?
Every state requires some form of trust or insurance protection, but the rules and the protected share vary. Ask where the money is held and confirm with your state's funeral board.
What happens if I move?
The contract stays with the provider. Transfer terms are in the contract. National providers transfer more easily than single-location funeral homes.
Do membership plans refund fees?
Generally no. Fees paid are the cost of coverage, and coverage ends if payments stop.