Glossary
Preneed
Preneed, or pre-need, refers to arranging and often paying for funeral or cremation services in advance, before death. A preneed plan lets a person choose their arrangements ahead of time and can lock in or set aside funds to cover the cost.
Preneed planning ranges from simply recording your wishes to a funded contract paid through a trust or insurance policy. It can spare your family from making decisions and payments while grieving.
Consumer protections for preneed money vary by state, and plans differ in how funds are held and whether they are portable if you move or change providers. Read the contract carefully and confirm what is guaranteed before paying.
Related terms
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Common questions
- Is it worth prepaying for a funeral?
- It can spare your family decisions and payments while grieving and may lock in some costs, but consumer protections for preneed money vary by state, and plans differ in how funds are held. Read the contract carefully and confirm what is guaranteed before paying.
- What happens to a preneed plan if I move or change my mind?
- It depends on the contract. Some plans are portable to another provider and some are refundable, while others are not. Ask specifically about portability and cancellation terms before signing, since they vary by plan and state.
- What is the difference between preneed and final-expense insurance?
- A preneed plan is tied to a specific funeral home and set of arrangements, while final-expense life insurance pays a cash benefit your family can use however they choose. Each has trade-offs in flexibility and protection.
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This definition is general information, not legal or financial advice. Laws and prices vary by state and provider. See our editorial standards.