Notice to the Consumer: Prepaid funeral contracts or prearranged funeral plans are recommended options

By Carey Smith, CEO & Registrar
Bereavement Authority of Ontario (BAO)

Buying final expenses insurance is being promoted by some as a convenient means to cover your funeral costs when you die.

What doesn’t get mentioned much is that there may be better options for you – the consumer – to consider, namely:

• Prepaid funeral service contracts;  
• Prearranged funeral service plans.

Both have their value and differences, and both are the best way for most people to either prepay or simply prearrange funeral services.

Here’s why….

Insurance – less preferred

Insurance allows you to spread out the cost of your funeral. But there may be drawbacks that make this a less preferred choice for most individuals and families.

The drawbacks include:

• If/when consumers decide to end their insurance coverage the premiums paid may not be refundable.
• Final expenses funeral insurance does not typically cover inflationary or other increases in funeral costs over the years. So, if the price of funeral services goes up – between the day you started making insurance premium payments and the day your funeral is held – the increase in prices may not be covered. Your family would have to cover that difference in costs.
• Like everything, funeral service costs go up over the years.
• You could easily overpay the actual cost of your funeral by making your monthly premium payments during the span of five, 10, or more years.

Prepaid – recommended

Prepaid funeral service contracts with a licensed funeral establishment or transfer service have many advantages for you and your family.

Prepaid funeral service contracts: 

• Cover the difference in price between the date you prepay for your funeral and when the funeral takes place, often many years later when prices will have increased.
• Protect your money through the BAO’s Compensation Fund, which protects your money regardless of whether the funeral home you signed a contract with exists any longer.
• Reduce your family’s stress by not having to make, and pay for, your funeral arrangements when they are grieving your death.
• Provide you with peace of mind having made the best choice for your family.

Prearranged – also recommended

Prearranged funeral plans made with a licensed funeral establishment or transfer service provide a means for you to document your funeral arrangements without paying in advance. This way your family members don’t have to make the plans and many necessary decisions during a time of grief.

With either prepaid funeral contracts or prearranged funeral plans there is no risk to you and your family.

About The BAO

The Bereavement Authority of Ontario (BAO) is a government delegated authority administering provisions of the Funeral, Burial and Cremation Services Act, 2002 (FBCSA) on behalf of the Ministry of Government and Consumer Services. Responsible for protection of the public interest, the BAO regulates and supports licensed: funeral establishment operators, directors and preplanners; cemetery, crematorium and alternative disposition operators; transfer service operators; and bereavement sector sales representatives across Ontario. The BAO is wholly funded by licensee fees (not tax dollars).