Prearrangements may be done for different reasons. One situation would be that an individual would like to take the decision-making and financial burden away from their loved ones at their time of need, so they plan ahead of time to express their wishes on their final arrangements. When doing this, there are a few different funding options. One option would be to fund the arrangement in full or on a scheduled payment plan ahead of time and guarantee the cost at today's price. Another option would be to make intermittent (unscheduled) payments on the total cost of the funeral even though the price will not be guaranteed until the cost is fully paid at that current date. You can also make arrangements and not fund it with anything at the time. In this situation your wishes are expressed but the price would continue to rise with inflation.

In a situation such as Medicaid, an individual may be required to spend down their assets and a pre-funded funeral would be an allowable expense. Payments may be made with check or credit card. If a life insurance policy is involved, funeral expenses may be covered with an absolute assignment or change of ownership and beneficiary.