Usually you can. Life insurance money can be assigned to someone else, and some prepaid funeral plans work this way. Ask your insurer and the funeral home how they do it.
To assign means you sign a paper that tells the insurer to pay part of the money to someone else first. Then the rest goes to your family.
This is allowed in many cases. Texas says you can assign part of a death benefit to a lender to pay a loan. The FTC says some state laws make funeral homes buy a life policy with the benefit assigned to them for prepaid plans.
There are two kinds of funeral insurance. Washington says standard funeral insurance pays the person you name, and they can use it any way. Pre need insurance pays the funeral home you pick and can lock in today's prices.
Rules change by state. The FTC says protection for prepaid funerals varies a lot from state to state, and some states offer little protection.
Tell your family. The FTC says if they do not know you prepaid, they could pay for the same funeral twice.
- What exactly am I paying for?
- What happens to money left over?
- What if the funeral home closes or is sold?
- Can I cancel and get my money back?
- What if I move or die away from home?
More questions
What if the funeral costs less than the policy?
Ask the funeral home and insurer in writing before you sign. Make sure any extra goes to your family.
Can I change my mind later?
Ask before you sign. The FTC says to check if you can cancel and get a full refund.
