No. It is a common misconception that preplanning means prepaying. You do not have to prepay, but you can. Making sure that funds will be available to cover your funeral cost is a sound financial decision, if you are able to do it. You have various options. You can enter into a contract with a funeral provider and prepay the provider or secure the contract with a funeral insurance policy. Another form of prepayment is to set up a funeral trust or a payable-upon-death bank account with the funds to cover you funeral cost. Final expense insurance is another option to consider if you prefer a monthly payment plan and do not wish to commit to a specific funeral provider in advance.