The funeral director who sells this type of policy usually receives a commission. A single payment or multiple payments can be made with coverage usually available when the policy is fully paid. The income and appreciation from the trust fund is the sole property of the funeral director, however, the individual may incur a tax liability on the income and appreciation. Another alternative is to fund a funeral with a savings account or some other instrument that provides for a right of survivorship, allowing the funds to pass outside of probate and the will. Individuals may want to join a local memorial society.
Individuals have a choice between guaranteed and non-guaranteed price plans.
The guaranteed price plan means no matter what happens to inflation in the future, the funeral you pre-pay will be provided at no additional cost. Without a guarantee, the family may have to pay additional costs at the time of the funeral. Not all pre-need funeral plans are portable, if you move to another part of the country. Individually funded plans are very portable and individuals can use them wherever they may die. Trust agreements can be changed, but penalties may be incurred.