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Funeral Pre-Arrangement Plans: What's A Disbursement Allowance?

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What's the most important thing to consider with funeral pre-arrangement plans? It's to actually inform family and friends that you have signed up for such a plan. When someone passes away and their next of kin are unaware of the plan, they will unnecessarily be left scrambling to cover the costs of the funeral. So be sure to inform those who need to know. Beyond that, it's really about the specifics of each plan and how they're relevant to you. One such aspect that can be extremely relevant is the plan's disbursement allowances.

Third-Party Costs

It might help to know just what a disbursement allowance is, but it's essentially the portion of your contributions that will cover third-party costs. These third-party costs can include a hearse, the hiring of a chapel, funeral home, and even the flowers—essentially any aspect of a funeral involving products or services coming from a third-party provider. But are these disbursement costs all that important?

Personal Preference

Whether these aspects of your funeral are important are entirely up to you. Some people don't think about the specifics of their own funeral service, and the most important thing is that the most important costs are covered. As long as a basic service, along with burial or cremation will be covered under the plan, you might not be particularly concerned beyond that. It might be that as long as the primary costs of the funeral have already been covered, this is all that matters. If this is your principal purpose in obtaining a funeral pre-arrangement plan, then disbursement allowances aren't especially relevant to you.

Specific Plans

If you want your funeral to happen in a specific way, then disbursement takes on considerable importance, as these third-party products or services are essential for allowing your funeral to take place in the manner you desire. This is simply a matter of ensuring that your chosen funeral plan accommodates these disbursements. Many plans will include these costs as a standard part of your contributions, whereas other plans will disregard them. When disbursement is included, you need to check the limitations of this allowance, as it might not be sufficient, meaning an upgraded plan will make more sense.

It's really a matter of acknowledging that funeral plans are different, and if the details of the service are important to you, then it's necessary to choose a plan that includes an adequate disbursement allowance, even though this will generally cost a little more.