Prearrangements can be done for different reasons. In some situations such as Medicaid, an individual may be required to spend down their assets and a pre-funded funeral would be an allowable expense. This could be done with cash or check. If a life insurance policy is involved it could be done with an absolute assignment or change of ownership and beneficiary. Another situation would be that an individual would like to take that 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. One option would be to fund the arrangement ahead of time and guarantee the cost at today's price. Another option would be to make payments on the total cost of the funeral even though the price would not be guaranteed until the cost was 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.