Damn, It Costs A Lot To Die! Cremation vs. Burial Costs

In an absolutely fascinating post on Daily Capital, I’ve learned that the cost of a funeral has risen from just $983 in 1971 to over $7,000 today. Meanwhile, as a result of the rise in funeral costs, cremation rates have SOARED from just just 6% to now over 43% in the same time period. Cremations “only” cost $3,000 a body, or roughly 55% less than a funeral.

Take a look at these charts by the National Funeral Director’s Association:

MEDIAN FUNERAL COST IN THE US

cost-of-funeral

US CREMATION RATE

cremation-rate

DEATH AND RELIGION

Religious Composition USAI used to think that cremation was more of a religious thing. If you ever travel around Asia, you’ll find that cremation is the way to go, especially in Buddhist, Hinduism, Jainism, and Sikhism countries. Cremation is believed to not only dispose of the body in this life, but also usher the soul into the next world or its rebirth into the next life. 

Christianity, Judaism and Islam all have traditions that frown upon cremation, if not outright prohibit it. For those of you who represent one of these three religions, is cremation really that bad? Islam, for example, instructs its followers to bury their dead as quickly as possible, preferably within the day of the death.

Given the above charts are for the USA, it’s curious to see such a high cremation rate when roughly 79% of the US population is Christian, 1.7% of the US population is Jewish, and 0.6% of the US population is Muslim. If cremation was really frowned upon in these three religions, one would expect the cremation rate in the US hover closer to around 20% rather than 43%.

So what gives? The answer must clearly have to do with the rapid rise in funeral costs. Money is trumping religion in this case, as it does in many cases in society. It costs a lot to die for average people nowadays, and folks who have estates in excess of $5.34 million per spouse thanks to the death tax.

WHAT WOULD YOU DO IF YOU HAD NO MONEY?

I’m not sure it’s legally possible to take a dead body of a loved one and burn it yourself or bury him or her in your backyard. In other words, you’re going to have to pony up at least $3,000 for a cremation and probably closer to $10,000-$15,000 for a burial and a wake. If you’re one of the thousands of people out there who are living paycheck to paycheck for whatever reason, this could be a problem.

Solutions:

* Go into credit card debt.

* Borrow money from friends and family.

* Ask the funeral service for a payoff plan.

* Exchange funeral services for services or items (bartering).

* Create a fundraiser. If there’s one time to ask for money from strangers, this could be it.

* Use a life insurance policy payout.

LIFE INSURANCE FOR FUNERALS

I haven’t had to think about funeral costs yet because my immediate family are all still alive. But eventually, all of us will die, and this subject has really made me focus on what type of life insurance policy I have for my dependents. I gave USAA a call (20 year member) and made sure my life insurance policy would cover ALL debts by 150% in case of my death. Not only that, I increased my umbrella policy by 50% given my net worth has increased over the past two years.

If you haven’t updated your life insurance or umbrella policy recently, I strongly suggest you do so. Property and auto insurance coverage is also good to review as your home’s value and risk tolerance changes over time.

Readers, if 80% of the US population is part of a religion that frowns upon cremation, why do you think the cremation rate is so high? Have you calculated the cost of death for a loved one yet?

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Tom says

    Sam,

    Cost is definitely a factor but I would wonder what % of religious people aren’t religious enough to stick to the rule. I know mostly Christians, and most of them seeing the cost of a funeral would rather go with cremation and have their ashes sprinkled in the back yard or a favorite place.
    With funeral cost getting so high I think most people don’t want to pass that burden on to their loved ones, so the cheaper route has become the more desirable way to go.

  2. says

    I’ve argued with my older sister about the death/life insurance thing before. She lives paycheck to paycheck, with no savings and more debt than she should have at her income level. She sees no point in having life insurance, since she has no dependents. I keep telling her she should at least have a small term policy to cover her funeral expenses. Her response? “That’s what family is for.” So, basically, her plan is that I’ll cover her funeral, should something happen.

    • says

      Hmmmm… so interesting how we have such different perspectives. I would absolutely NOT want my family to be burdened by funeral costs. I am assuming they’d already be grieving already, so to add another punch in the gut doesn’t seem nice. I would hope my death brings them a financial WINDFALL instead.

      • says

        I feel the same way! I always joke that I’m worth more dead than alive. Even though I’ll probably never have children, and no one but me depends on my salary, I want to make sure if something happens to me, I’m not a burden on my family. Term policies are so cheap, I can’t see not having one! I have a term policy on myself, in addition to the life insurance I have through work. I also have a term policy on my younger sister that I took out years ago, due to a student loan I cosigned on. I’ve kept the policy, even though the loan is paid off now (she has 2 kids, and lives a very unstable life). I just can’t understand my older sister’s position. It’s not like she comes from a wealthy family!

        • Fatchance says

          My father in law does not trust banks. He literally keeps his money in cash in (actually under) his mattress. During his last visit, he wanted to keep some of his cash in our safety deposit box just in case of an emergency. I was completely against this on principal (get your own safety deposit box). Turns out, my wife let him stash his cash there anyway. When I went to the bank/safety deposit box, I saw $7000 in cash that I know I did not put there and discussed this with the wife.
          Me: “Give your dad his money back. I do not want any responsibility for his cash in any way, shape or form.”
          My Wife: “He has no life insurance. If he dies, at least we will have enough to bury him while we figure out his estate.”
          Me: “Good point, he can keep his money in our box.”
          Now I just kind of consider this his hillbilly life insurance policy :-)

  3. says

    I’m not a Bible scholar by any means, but I have read/studied it a fair amount and I think that most of the rules on burial are more related to sanitation than what happens to the person after death. If you consider Christianity in light of Jesus and recognize that a lot of the old testament rules no longer have the same context, it doesn’t really dictate what to do with your body once you die. My personal wish is to be disposed of however will present the least burden to my family… ie take any useful organs, donate the rest to science, bury me in the back yard, whatever. I’m not going to need my body, so I’d prefer it be as useful as possible to people who are still living.

    • says

      I like your attitude David. I’m an organ donor on my driver’s license too. If I could save my loved one’s money upon death, I absolutely will. But I think the biggest savings is to have a rock solid life insurance policy.

  4. Charles says

    Many funeral homes off pre-planning services. Not only can this be helpful financially for many families, but it can be extremely helpful to have all of the logistics and arrangements planned out in advance and not have to worry about asking grieving loved ones to have to deal with making those arrangements on short notice.

    • says

      For sure. I would think funeral homes need pre-planning services for their financial survival too. Can you imagine living paycheck-to-paycheck trying to make ends meet and goodness forbid a loved one dies? There’s not choice but to go with a layaway plan and honored their death.

      • says

        When you preplan your funeral, the money typically goes into a trust that the funeral home should not have access to. The money is typically put into some sort of investment vehicle so that it can grow along with the rising costs of your funeral. In many cases, the funeral home actually loses money when you preplan. That typically happens when the money you prepaid with doesn’t grow as fast as the cost of the funeral you selected.

  5. says

    Actually, inflation calculators show funeral costs increasing less than inflation, and by a lot! “What cost $708 in 1960 would cost $5413.66 in 2012.” – source westegg.com inflation calculator

    Great topic, one that has been of discussion quite a bit in my family. On one side, I have 16 cousins, on the other 12 cousins. Nobody is tight, and nobody visits gravesites after the burials. Cremations have become more common, and the ability to post a written memory on a website for the deceased is a relatively new development that everyone in my family seems to like and remember. One thought on the shift from burial to cremation, is that US society has become more mobile and more fragmented. Families live in different parts of the country, children have never met their cousins, grandparents have never met their step-grandchildren, etc. There is a great expense and time commitment for people to travel for a funeral, and even if they don’t they must take a day off work. I do attend funerals, for the benefit of surviving family and friends, to show support; but too often, I am spending time and money on attending the ceremony that I never would have spent visiting the deceased while they were alive. The ceremony is often a little embarrassing; the priest mispronounces the name of the deceased, the turnout is embarrassingly small, family schisms are on display, and if people feel obligated to “say a few words in rememberance” they turn it into their own personal open mic. Ugh. For myself, I’m donating my body (as David W notes, above), do not want to burden anyone with money or time obligations.

    P.S. – my experiences with funeral professionals (like Holly Johnson, who wrote the source column) has been excellent, and I have been so impressed with the combination of compassion and courtesy. A very tough job, much appreciated.

    • says

      “One thought on the shift from burial to cremation, is that US society has become more mobile and more fragmented. Families live in different parts of the country, children have never met their cousins, grandparents have never met their step-grandchildren, etc. There is a great expense and time commitment for people to travel for a funeral, and even if they don’t they must take a day off work.”

      Good point. I didn’t make it to one relatives funeral about 15 hours of travel away, but I was there weeks before he died to spend time with him. I wrote a letter to be read at the wake too. It was a difficult time.

    • says

      I have to admit when i first heard of this idea years ago, it spooked me. By now it’s grown on me. People visit gravesites to remember and speak to loved ones, looking at a headstone or a plaque on the ground. I would rather think of a loved one under a tree. I imagine nurturing a tree into maturity would be therapeutic while I grieve… Altho, if the tree didn’t make it, I imagine that would be insult to injury.

  6. says

    It is a bit surprising how quickly people can be taken advantage of during times of emotional highs and lows (funerals, marriage, ceremonies etc.).

    Unfortunately after seeing more than a few family members die, we adopted the “cremation only” plan where everyone is encouraged to go this route.

    As my grandmother used to say:

    “Don’t come to my funeral! If you want to see me, come see me when I am still alive!”

    Instead of using the scam that is burials as a negative, use it as a positive reminder to call your mom/dad/grand parents when you have time to do so.

    • says

      I don’t think it’s fair to say that burial in itself is a scam. After working in the funeral industry, I can say that I’m actually surprised how many people *want* expensive services. Some people knowingly upgrade to more expensive caskets, or even ask for the most expensive casket available.

      A lot of people seem to think that the funeral industry is a scam in itself, but it’s not true. You can’t blame businesses for stepping in to fill a need. That’s capitalism for you and that’s the system we have. It’s the consumer’s job to seek out pricing options that they are comfortable with.

    • says

      I’d have to agree with Holly on this one. Not that I have experience working in the funeral industry, but I do have many years experience working at an event venue, planning mainly weddings. Sure, there are people out there who will scam you, and push you to spend as much as possible; That’s true in almost every industry. But, we were a popular venue, I wasn’t on commission, and we also had a restaurant/bar/biergarten where a large chunk of our revenues came from. We never pressured our clients to spend more, we didn’t need to, and there were numerous times I had to talk a bride (or someone else in the wedding party) back down to reality. People get into the mindset that it’s a “once in a lifetime” thing, and they have to have the best/biggest/most unique. I can imagine the same applies in the funeral industry; People feel like they have to provide the best out of respect for their loved one. Death also often happens unexpectedly, and you have a very short time period to plan things, and you add in grief; People often aren’t thinking clearly, or seeing the long-term, big picture. But just because people make bad choices, doesn’t mean the funeral home is taking advantage of them. As a business, they have to balance steering people in the right direction with giving their customers what they want. Not an easy balance when emotions are involved!

      • says

        I think it’s like any other business where a few bad apples give everyone a bad name. The funeral home my husband and I worked for had an impeccable reputation. They often went above and beyond to make sure their policies were fair and respectful to families. They tried letting people make payments for years, however, and had to stop because so many families simply quit paying.

        Even though they were completely transparent and ethical in all of their decisions, they were occasionally accused of scamming people. Typically, the accusations were made by people who wanted something for free and hoped to draw on other people’s sympathies to get it.

  7. says

    I want to be cremated. Being buried in a coffin that will probably take an eternity, or perhaps never, to decompose freaks me out. It always weirded me out when I went to funerals that do burials with coffins. I’d rather just turn to ash that will turn back into the earth as quickly as possible. And any way to save is good too. If I’m already dead I’d want to save my family as much as possible.

  8. says

    When my father-in-law passed recently my wife’s family decided on cremation and largely it was due to the high burrial costs. He was a Christian and he wasn’t opposed to cremation – they talked about it prior to him passing. I think lots of families are doing the same thing and so cremation rates at on the rise.

  9. says

    My dad was cremated, but that was because he wanted to be. There was still a full funeral (except for the actual burial), and I believe the cost was $6,000.

  10. Eric says

    The funeral business is much like the wedding business, they will screw you at every possible turn.

  11. S says

    I agree with the earlier commentor that a lot of religious burial rules probably have their origins more in hygiene than religious precepts, but they were sold under the latter as a way to get people to follow these rules because it benefited society as a whole.

    The Catholic Church lifted its ban on cremation in 1963. I’m sure this had an affect on many as to whether cremation is acceptable or not.

  12. Michael says

    It’s my understanding that, before WW2, Jews didn’t have a problem with cremation. After the Holocaust, cremation for Jews became far less common for obvious reasons.

  13. Catie says

    I can’t imagine having to pay the full cost of a burial. My husband and I did the pre-paid funeral. At first we had the full plan.. casket selection and all. A few years later the cemetery opened up a mausoleum and we signed on for that. We both wanted to be thrown to the wind, but we left it up to the kids. Seems they had issues with us getting scattered. With the savings we asked that they throw a party. I have gone so far as to ask for certain music selections… have to have some of my favorite artists. Now my Dad has gone a different route, he donated his remains to a teaching hospital. The cost on that was the delivery fee and the memorial service at his favorite church.

    I agree with a prior post… Catholics lifted their ban on cremations in the 60′s and since I come from a long line of Catholics, I was ok in my decisions.

    I think given the way we procreate cremation may become a necessity simply to save the real estate.

    • says

      I’m digging the attitude! Who doesn’t love a good party? Glad you guys are planning ahead!

      I think perhaps most of us (?) would rather delay for as long as possible. It’s an interesting dynamic to come to terms with death WITHOUT giving up life while still living no?

  14. says

    I really don’t see cremation being in conflict with a Christian belief system. There are not instructions/teachings from the Bible that I’m aware of that outline how a body has to be buried for a believer. I’d be curious to look into that and find out where that conflict comes from.

    My father-in-law was cremated and his ashes spread at sea per his wishes. I would try to honor whatever was laid out in the will or whatever the family wanted no matter the cost (within reason).

  15. says

    A while ago I learned that the reason for one of T’s family member’s precarious financial state was covering her mother’s end of life costs (funeral and presumably a few healthcare things as well).

    Worrying as we will presumably wind up responsible for this family member’s funeral costs when she passes, in turn.

    I’ve gone back and forth over the years about burial – currently leaning toward either cremation or donating my body to science.

  16. says

    I keep getting those solicitations from the Neptune Society! My wife and I have to start planning those arrangements soon. the money is the least of it. You should never leave those things to your relatives for a lot of reasons. It is the worst time for them to make those decisions and it generally is not how you would do it anyway. It is also a good way to tie down the costs.

    • says

      Very interesting! I mean, burying one in their own plot of land they’ve owned for decades seems reasonable. Might not be good for home resale though. That would kind of spook me as a buyer.

  17. Robert Main says

    Many people just do not follow religion in all aspects of life. The increase may be just a trend due to some influence in society from other cultures.

    In my life I have also see several people expressing the desire to get cremated just to avoid to have their loved ones to pay a fortune for them.

  18. says

    It’s worth nothing that, in some areas, cremation discounters will do a direct cremation for as little as $700. You can also donate your body to science for free, but you do have to get approved ahead of time.

    A few of the commenters above stated that the funeral industry is rife with scams and scammers. Let me present another perspective:

    I can’t tell you how many times a family has asked for a 12K or more funeral yet had zero dollars to pay for it. When that happens, they almost always blame the funeral home for “scamming them.” Many times, families even claim to have life insurance or cash to pay for their funeral yet disappear once the deed is done. How would you feel if someone walked out on the $12,000 bill they owed you? Scammed?

    One time my husband told a family that he could not perform their funeral service unless they paid at least half upfront. They took his business card and taped it to plastic containers then took those containers around town to raise money. They wrote little signs that said that my husband was actually scamming them and trying to extort money from them. All he asked is that they pay for their funeral.

    There are certainly funeral homes who scam people or try to upsell them. Likewise, there are families who scam the funeral home. There are also families who scam the public by fundraising for the funeral then keeping the majority of the money for themselves. I’ve seen it all.

    • says

      Holly, the funeral business sounds like a TOUGH business! I can’t imagine the emotional distraught that comes with trying to make money.

      With you and your husband seeing so much death, did you become inured to the act of dying? Or did you guys develop a stronger appreciation for life or anything like that?

      • says

        It really is a tough business. It’s very difficult to balance compassion and sympathy with your need to be paid for your services. Many people assume that everything is “free” or that their is an endless supply of money funding all of it. The truth is, when people walk out on an expensive bill, the funeral home has to absorb those costs. They have to pay for your casket, vault, flowers, etc. They not only don’t make any money, but they actually are out thousands of dollars. Then people wonder why the costs have gone up so much….it’s because so many people never pay!

        I would say that we are both totally desensitized about death. I mean, I used to eat lunch in a room with casketed dead bodies every day. When you live that way day in and day out, it’s hard to get too worked up about any particular death.

        On the other hand, I did have a lot of compassion for the families who were suffering. Every life is important, and I tried to reinforce that idea through my dealings with each and every family. At the funeral home, we often met people on the very worst day of their lives and in a fragile state. I truly enjoyed swooping in and providing exceptional service. It certainly didn’t take their pain away, but it did reduce some of their burden.

        It’s true that life can be over in an instant. My time in the industry (and my husband’s continued career) has taught me that we should enjoy every moment and make it count.

    • says

      I was waiting for you to chime in. :)
      I’d probably just go for cremation. It’s just easier for everyone. The family can toss my ash in the Pacific ocean off Hawaii and take a vacation at the same time. It’ll be good to get away and relax after that kind of mental trauma…

  19. says

    I’ve always leaned towards cremation, not just because of the cost but there’s something more environmentally conscious about it. If it were legal, I’d actually want to float out to sea on a pyre and burned like the vikings.

  20. says

    I was just working on an article for my own website for this, since I know all too well the costs associated with burials. We literally had my father’s burial and my father-in-laws burial within a 1 month period. You want to talk about crazy talk, my mother-in-law just went to see how much the tombstone would be for my father-in-law and get this first number he gave her after telling her she could get this/that/the other thing … $35,000. That was for just the tombstone!
    She said her budget was $10k-$12k. Somehow the guy managed to get it down to $12.9k with keeping everything she wanted!

    As far as cremation, I know for a fact that for a little while, the Catholic religion (one of the Christianity flavors), has accepted cremation as long as last rites are performed.

      • says

        She wasn’t about to pay that much, she would have left it with no tombstone. That would have literally eaten up about 2/3 of the money he had saved over his lifetime.
        She is checking with several other places and may accept the $12,300 offer that he eventually came down to.

  21. says

    My wife and I have both put cremation in our living wills. I told my wife that when I go, I want my ashes to be treated the same as they did in the Big Lebowski, although she should be sure to stand upwind.

    My dad’s ashes are sitting in a cheap box from the crematory. My mom will also be cremated when her time comes, and then we will spread both their ashes at sea. Pretty low key and low cost. Just the way they want it.

    • says

      Sounds like an economical and easy way to go. I’m really impressed with how many people have thought this thing through. I haven’t put how I’d like to be handled when I die in my will. I think I’ll do that this year.

  22. Rob says

    “Family schisms on display” oh yah!!!!

    When my Mom died somewhat unexpectedly, my Dad not quite prepared for went the funeral home route and it cost about 12 grand (CDN) and kind of freaked him out so he made sure he had a cheap prepaid cremation planned and no funeral. When he died my family too, his wishes too seriously and decided no funeral which left me in a very awkward spot as his sister and us wanted one. My brother went as far to skip the funeral As well ended not only planning the whole thing but paying for it as well up paying for it as well, thankfully he was a member in good standing with his church so they hosted it and I made a nice donation on his behalf.

    Going home (we live in Europe) next year and one of our priorities is redoing our very out of date wills, and thanks to your column I will be putting in a note saying I want a real funeral. Hell our family will be able to afford it, our life insurance is almost a mil alone plus other assets and hell no kids.

    Thanks for letting me rant

    Rob

  23. Suki F says

    Oh yes! It is so expensive to die these days. It is simply ridiculous.

    What I did was to buy this thing that is almost like a package from a funerary place that includes pretty much everything. I even got to pick the color of the flowers. They offer this where you can divide de cost and pay it monthly through a year. I don’t want my family to have to worry about that if anything happened to me.

  24. says

    You make some really good points here. People do need to think about the financial costs of things, and it generally helps to keep an open mind while also being considerate to your family at a difficult time. Nobody wants to burden others at that time, right? At least one would hope.

    All this being said, this is the type of discussion/topic that we need to think about for ourselves and family whether we like it or not. At this point, admittedly, I’m averse to thinking much about it. Maybe the ostrich “head in the sand” approach is good in short term sometimes, to help us enjoy what precious time we do have.

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