Both are ways to pay for a funeral in advance, but they work very differently.
Prepaid funeral plan
- A contract with a specific funeral home for specific goods and services.
- You pay up front or in instalments.
- Provinces regulate these contracts. Many require the money to be held in trust or otherwise protected. Check the rules on your province's page.
- Ask what happens if you move, change your mind or the funeral home closes.
Final expense insurance
- A life insurance policy that pays a cash benefit to your beneficiary.
- The money isn't tied to one funeral home, so your family can use it for any cost, including bills.
- You pay premiums over time. Depending on how long you live, total premiums can be more or less than the benefit.
- Waiting periods and exclusions may apply in the first years.
Which fits?
A prepaid plan can suit someone who knows exactly what they want and where. Insurance can suit someone who wants flexibility or wants money left for other costs. Some people use both. A licensed advisor can help you compare your actual options.
This guide is general information, not insurance, financial, legal or tax advice.