The Portability Trap: Why Your Ohio Funeral Plan is Worthless in Florida
Don’t Let Your Funeral Plan Be Held Hostage by Geography
You live in Ohio. You walk into the local funeral home and pre-pay $10,000 for a lovely service. Five years later, you move to Florida to be with your grandkids. You assume the plan moves with you. It usually doesn’t.
Funeral contracts are often tied to that specific business or a state-specific trust. If you die in Florida, your family has to try to cancel the Ohio contract. The funeral home may charge a “cancellation fee” (often 10-20%) or only refund the principal without interest. Worse, inflation means that $10,000 from 2015 might not cover a Florida funeral in 2025. Final Expense Insurance is cash. It follows you to any state, any funeral home, anywhere in the world.
The ‘Price Lock’ Myth: Why Pre-Paid Funerals Still Send You a Bill
The “Guaranteed” Price Doesn’t Cover Everything
The funeral director tells you, “Pre-pay now, and we guarantee the price of the casket and services won’t go up.” That sounds great. But read the fine print for the section called “Cash Advance Items.”
These are third-party costs: the flowers, the police escort for the procession, the obituary notice in the paper, the death certificates. The funeral home cannot guarantee these prices because they don’t control them. When you die, your family will still get a bill for these “extras,” which can easily add up to $2,000 or more. A pre-paid plan rarely means “paid in full.”
When the Funeral Home Goes Bankrupt: Who Has Your Money?
A Funeral Home is a Business, Not a Bank
We trust funeral directors, but they are small business owners. What happens if they sell the business, get sued, or go bankrupt? In the past, there have been horror stories of directors embezzling pre-need funds or failing to put the money into a state-regulated trust.
If the money wasn’t trusted correctly, you are an unsecured creditor in a bankruptcy court. Your $10,000 is gone. With an Insurance Policy, your money is held by a massive, regulated financial institution (like Mutual of Omaha or Aetna), not a local shop on Main Street. Even if the funeral home burns down, your insurance money is safe.
The ‘Unit Pricing’ Scam: The Truth About the $9.95 TV Ads
The Price Stays the Same, But Your Coverage Shrinks
You know the ads. A celebrity promises coverage for “$9.95 a unit.” They say the price will never increase. That is technically true, but it is a masterclass in deception.
They sell you “units.” At age 65, one unit might buy $1,000 of coverage. At age 75, that same $9.95 unit might only buy $600 of coverage. As you get older (and closer to death), the value of what you bought evaporates. It is a “diminishing asset.” You could pay in $5,000 over ten years only to have a death benefit worth $3,000. It is almost always a terrible deal compared to a fixed-benefit policy.
Beneficiary Theft: Why You Should Never Name the Funeral Home as Owner
Keep Control of the Extra Cash
Some funeral homes pressure you to name them as the “Owner” and “Beneficiary” of your insurance policy to “make it easy.” Do not do this. If your policy is for $15,000, but the funeral only costs $10,000, the owner of the policy gets to keep the change.
If the funeral home is the owner, they keep that extra $5,000. If your daughter is the beneficiary, she pays the $10,000 bill and keeps the $5,000 to help with other bills or an inheritance. Always name a trusted family member as the beneficiary, and let them execute an “Assignment of Benefits” to the funeral home only for the exact amount of the bill.
Pre-Need Trust vs. Final Expense Insurance: The Ultimate Showdown
Locking Cash Away vs. Keeping It Liquid
A Pre-Need Trust is a contract for goods and services. You are buying a casket and a service in advance. The money is locked up. You generally cannot touch it if you have a financial emergency (like a leaky roof).
Final Expense Insurance is a life insurance policy. It pays cash. The beneficiary can use the money for a funeral, but they can also use it to pay off your credit card debt, medical bills, or property taxes. It offers liquidity and flexibility. If you decide to be cremated instead of buried, the family keeps the savings. A pre-need trust traps the money in the funeral industry; insurance gives it to your family.
Globe Life vs. Mutual of Omaha: Why ‘Term’ Burial Insurance is a Trap
Don’t Outlive Your Coverage
There are two types of life insurance: Whole Life (lasts forever) and Term (lasts for a specific time). Globe Life often markets “Term to Age 80” policies to seniors because they are cheap.
Here is the nightmare scenario: You pay premiums for 15 years. You turn 80. The policy expires. You lose all your coverage. Now you are 80, likely in poorer health, and trying to buy new insurance is insanely expensive. For burial planning, never buy Term insurance. You must buy Whole Life (like Mutual of Omaha Living Promise) because the one thing we know for sure is that you will eventually die, and you need the policy to be there when you do.
Guaranteed Issue vs. Simplified Issue: Don’t Buy the Waiting Period if You Don’t Have To
The “No Questions Asked” Penalty
“Guaranteed Issue” policies (like the ones sold on TV) ask zero health questions. They accept everyone. Because they take high risks, they are expensive and come with a 2-Year Waiting Period. If you die of natural causes in the first two years, they only refund your premiums; they don’t pay the full benefit.
Most seniors assume they need this because they take blood pressure meds or have high cholesterol. That is wrong. “Simplified Issue” policies ask a few questions but accept common conditions. They are 30-40% cheaper and cover you from Day 1. Only buy Guaranteed Issue if you have a terminal illness or very serious recent health events.
The ‘Gerber’ Plan for Seniors: Is It Just for Babies?
A Solid Name, But Check the Rates
Gerber Life is famous for the “Grow-Up Plan” for kids, but they sell “Guaranteed Issue” policies for seniors too. Because it is a strong brand, seniors trust it.
However, Gerber’s senior product is strictly Guaranteed Issue. That means it always has the 2-year waiting period. If you are healthy enough to answer “No” to a few medical questions, you can get a better deal elsewhere. Gerber is a good “last resort” carrier for people with severe health issues, but for the average senior, you are paying for a brand name rather than better coverage.
Funeral Assignment Forms: A Better Way to Pay the Funeral Home
You Can Have “Pre-Paid” Convenience with Insurance Control
People pre-pay funerals because they don’t want their kids to stress about payment. You can achieve this with insurance using a “Funeral Assignment.”
When you pass away, your daughter takes your insurance policy to the funeral director. She signs a form that says, “I assign $8,000 of this policy to the Funeral Home.” The insurance company pays the funeral home directly within days. The remaining money goes to your daughter. This gives you the convenience of direct payment without the risk of locking your money into a pre-paid contract years in advance.
Burial Insurance for Diabetics: Insulin Before 50 vs. After 50
The Details That Determine Your Price
Diabetes is the most common condition we see. Insurance companies rate it based on stability and when you started insulin. The magic number is usually age 50 (or sometimes 40).
If you were diagnosed with Type 1 or started insulin before age 50, insurers view you as higher risk (complications are more likely). You might pay a higher rate. If you developed “adult onset” diabetes and started insulin at 55 or 60, many carriers (like Aetna or Prosperity) treat you as “Standard” risk. We help you find the carrier that is friendly to your specific “diabetes timeline” so you don’t overpay.
The ‘2-Year Waiting Period’ Loophole: Accidental Death Exceptions
Even “Waiting Period” Policies Pay for Accidents
Let’s say you have severe health issues and had to buy a Guaranteed Issue policy with a 2-year waiting period. You are worried that if you die next month, your family gets nothing.
That is only partially true. The waiting period applies to natural death (cancer, heart attack). If you die by Accident (car crash, slip and fall) during those first two years, the policy pays the full death benefit immediately. It is a small comfort, but it means you aren’t completely unprotected during the waiting period.
State Burial Assistance vs. Insurance: Do You Qualify for the $255?
The “Government Will Pay for It” Myth
A shocking number of people believe “Social Security pays for the funeral.” This is a dangerous myth. Social Security pays a one-time lump sum death benefit of $255.
That barely covers the cost of the flowers. Furthermore, it is only paid to a surviving spouse or eligible child. If you are single, your estate gets nothing. The average funeral costs $9,000. Relying on the government means leaving your family with an $8,745 bill. You cannot plan your end-of-life finances around a $255 check from 1954.
Medicaid Spend-Down: The Only Time I Recommend a Pre-Paid Plan
Hiding Assets from the Nursing Home
There is one specific scenario where I tell clients to buy a pre-paid funeral plan: Medicaid Spend-Down. To qualify for Medicaid (which pays for nursing homes), you must have very few assets (usually under $2,000).
If you have $15,000 in savings, Medicaid will make you spend it on the nursing home before they help. However, you are legally allowed to take that money and put it into an Irrevocable Funeral Trust. This counts as “spending it,” but the money is reserved for your funeral. It is one of the few ways to save your funeral money from being eaten up by nursing home bills.
The ‘Neuropathy’ Knockout: Why This One Question Ruins Applications
Tingling Toes Can Double Your Premium
You are applying for “Day 1 Coverage.” You answer “No” to heart attack, stroke, and cancer. Then you see the question: “Have you ever been treated for complications of diabetes, including neuropathy?”
If you have tingling in your feet, you have to say “Yes.” For major carriers like Mutual of Omaha, this is a “knockout”—they will decline you or push you to a graded plan. However, other carriers (like AIG or Great Western) are more lenient. Knowing which application doesn’t ask about neuropathy can save you $30 a month.
The ‘Cremation Only’ Insurance Strategy: Why You Only Need $3,000
Don’t Over-Insure if Your Wishes are Simple
Not everyone wants a viewing and a bronze casket. Direct cremation is becoming the norm. It costs between $1,500 and $3,000. Yet, agents will try to sell you a $10,000 policy.
If your wish is cremation, buy a small $3,000 or $5,000 policy. It covers the cremation, the urn, and a nice dinner for the family. Keeping the face amount low keeps the premiums tiny—often under $25 a month. Don’t let a salesperson guilt you into buying “funeral” coverage for a “cremation” plan.
Why I Always Choose ‘Level Benefit’ Over ‘Graded Benefit’
Get 100% Protection from Day One
When shopping for Final Expense, you will see terms like “Level,” “Graded,” and “Modified.” Level Benefit is the gold standard: you die tomorrow, they pay 100%.
Graded Benefit usually pays 30% if you die in year 1, 70% in year 2, and 100% in year 3. It costs about the same as Level. Agents sometimes put seniors into Graded plans because it’s “easier” to qualify. Don’t accept this unless you are truly uninsurable. Fight for Level coverage. It is the only way to ensure your family is safe immediately.
My Verdict on ‘Colonial Penn’: The Most Expensive Insurance You Can Buy
The Math Behind the Marketing
Colonial Penn is a marketing machine. But let’s look at the math. If you are a 68-year-old male, one “$9.95 unit” might get you $700 of coverage. To get a standard $10,000 funeral policy, you would need to buy 14 units.
14 units x 9.95= 139.30 per month. A standard policy from a competitor like Mutual of Omaha might cost that same man $70 per month for the same $10,000 benefit. You are paying double strictly for the convenience of not answering health questions. Unless you are on death’s door, avoid unit pricing.
The 3-Step Burial Plan That Replaces a Funeral Contract
Better, Safer, and Cheaper
You want peace of mind. You don’t need a contract to get it. Here is the strategy I use for my own family:
- Document Your Wishes: Write down exactly what you want (hymns, casket type, cremation vs. burial). Give copies to your kids.
- Buy Final Expense Insurance: Calculate the cost of those wishes and buy a policy for that amount. Name your child as beneficiary.
- The “In Case of Emergency” File: Put the policy and the wishes in a red folder. Tell your kids where it is.
This creates the same result as a pre-paid plan, but you keep control of the money.
My Final Verdict: The Portfolio Approach to End-of-Life Costs
Leave a Legacy, Not Just a Paid Bill
Final Expense insurance isn’t just about dirt and flowers. It’s about how you are remembered. If the funeral costs $10,000, buy a $15,000 policy.
That extra $5,000 isn’t “profit”; it’s a final gift. It pays for your daughter’s flight to the funeral. It pays for the time she took off work. Or it’s a small check for the grandkids’ college fund. By using insurance instead of a pre-paid contract, you turn a sad logistical event into a final act of love and support for your family.