Assignment funding is the part of a funeral home’s business that rarely gets explained in full. Most funeral homes we talk to already use a funding company. Plenty of directors have signed hundreds of assignments without ever reading a plain account of the service. What is it, what does it cost, and where does the money go? Two kinds of directors tend to go looking for one. The first runs a funeral home that has always processed assignments itself, on its own forms. That director wants to know what a funding company would change. The second has used one for years and wants to understand what the fee buys. Maybe a claim went sideways, or the rate came up at a partners’ meeting.
This guide is for both. It explains what assignment funding is and why the profession calls it funeral funding. Then it follows a claim from the arrangement table to the day the insurance company’s check arrives. Along the way it shows where assignments sit among the ways families pay. And it puts the cost in terms every funeral home already understands: the fee on a credit card. Our other funeral home resources go deeper on each piece; this one is the overview.
What Assignment Funding Is, and Why the Profession Calls It Funeral Funding
Start with the plain version. Assignment funding is a service in which a funding company verifies a life insurance claim assigned to the funeral home, pays the funeral home its bill before the insurance company pays, and waits for the insurance company itself. The funeral home gets its money in days. Weeks or months later, the insurance company pays the funding company, while the beneficiary receives the remaining policy proceeds according to the carrier’s payment schedule.
Assignment funding is what the profession often just calls funeral funding. The two names describe the same service, and you’ll hear them used interchangeably at any convention. One note on the second name. Outside the profession, “funeral funding” also gets used for consumer loans and for assistance programs, which are different things entirely. This service isn’t a traditional loan to the family. The funding company advances its own funds against a verified life insurance claim, then collects the assigned proceeds from the insurance company. Some companies describe the service as life insurance assignment funding for that reason, and it’s the more precise name.
What Is an Insurance Assignment?
An assignment is the document that makes all of this possible, so it deserves a plain definition. An insurance assignment is a signed instruction from a policy’s beneficiary directing the insurance company to pay a stated portion of the death benefit to the funeral home. The beneficiary signs it at the arrangement table, usually on the funding company’s form. Then the funeral home passes it along to the funding company. If you want the full picture of what a life insurance assignment is and how carriers handle one, we’ve written it up separately. You can also read our guide on how to choose the best insurance assignment company for your funeral home.
At Family Funeral Funding, we’re a family-owned assignment funding company, and we handle insurance assignment funding for funeral homes across the country. The rest of this guide describes the service the way we run it, step by step.
How Assignment Funding Works, Claim by Claim
Mechanically, the service is simpler than the paperwork suggests. Here is a claim from start to finish, in the order a director experiences it.
Before Funding
The family identifies a policy at the arrangement conference, and the beneficiary signs the assignment. The funeral home sends it to the funding company, and the clock starts. Verification means the funding company confirms with the insurance company that the policy was in force at the time of death, that the appropriate beneficiary is identified, and that the benefit is sufficient to cover the assigned amount. During normal business hours, we aim to make our first call to the insurance company within five minutes of receiving a completed assignment. On that call, we report the death, begin verification, and confirm as much as the carrier can provide.
Verification comes before funding, always. We carefully review each claim before advancing funds to minimize the risk of a denied claim. More than 99% of claims are funded immediately after verification, and those funds typically reach the funeral home’s bank account within 24 hours. We send the funds directly to the funeral home’s bank account via ACH. One more thing happens on the form itself. Our assignment form also includes a power of attorney (POA), allowing us to work directly with the insurance company and complete the necessary claim paperwork on the beneficiary’s behalf. This authority relates to the insurance policies and claims covered by the assignment, rather than granting general control over the beneficiary’s personal finances.
After Funding
Funding isn’t the end of the claim; it’s actually the middle. After a funding company pays the funeral home, it files the claim with the insurance company and follows up until the carrier confirms it holds everything it needs to pay. We follow up daily until the carrier confirms receipt of the assignment. Then we confirm on record (COR) that the carrier holds all pertinent paperwork and will pay the assigned portion. After that, we follow up regularly until the payout arrives. When our check arrives, the claim moves to Closed, and the Closed date shows in your dashboard. Insurance companies typically issue the beneficiary’s remaining portion around the same time they issue payment for the assigned amount, although processing and delivery times can vary by carrier.
There’s also an additional option a director can offer the family. A family advance is an assignment for more than the funeral bill, so the family receives money from the policy now rather than waiting for the claim to pay. The full amount is sent to the funeral home via ACH, and the funeral home provides the family with a check for the additional funds. The same funding fee applies to the additional amount advanced. And at no point does the funding company call the family on its own. We never contact a beneficiary without the funeral home’s permission. When a family calls us to confirm our legitimacy, we validate our business model and explain our process, and then route them back to you.
Every carrier’s claim forms are part of this work, which is why our client system includes a Claim Form Library. You’ll find it under Form Downloads in your Claim Dashboard. The library holds insurance companies’ claim forms, searchable and downloadable, and it’s free to any approved user. A funeral home can register an account at no cost to use it.
Where Assignment Funding Sits Among the Ways Families Pay
Families use several established methods to pay for funeral services, including cash or check, credit cards, life insurance assignments, and, in some cases, outside financing or payment plans. For funeral homes that regularly accept life insurance, assignments are a familiar part of the payment process. From what we’ve seen, more funeral homes are recognizing the value of offering insurance assignments as a payment option.
That distinction matters. An assignment is not a fringe arrangement a funeral home accepts as a favor. It’s a standard way a funeral gets paid, and families often arrive expecting it. A director who brings it up early in the arrangement conference usually finds the family relieved to hear the option exists. For many families, the policy is the one asset they know they have. For the family-facing version of this list, we’ve written about how funeral homes get paid on the family side of our site.
One distinction keeps coming up, so here it is plainly: Assignment funding is not a traditional loan to the family. Rather than borrowing money and making monthly payments, the beneficiary assigns a portion of an existing life insurance benefit toward the funeral expenses. The funding company advances that amount to the funeral home and subsequently collects the assigned proceeds from the insurance company. At-need financing exists, and some funeral homes offer it through a lending partner. That’s a different product with different rules. An assignment applies a portion of the death benefit toward the funeral bill, and that’s all it does.
Our part is to make assignment funding a dependable payment option for the funeral homes we serve. The directors we work with know their funeral home funding arrives on a verified claim. They also know who to text if a question comes up, because the partners who own the company are the ones verifying the claim.
What Assignment Funding Costs, in Credit Card Terms
Here is the number, and then the way to think about it. Our fee is 3.5% of the funeral bill, meaning the net amount paid to the funeral home, with a $125 minimum. On a funeral at the NFDA’s reported 2023 median of $8,300 for a funeral with viewing and burial, that’s $290.50. Assignment funding fees are typically percentage-based, making them comparable in some respects to the credit card processing fees funeral homes already understand. The services are different, but both involve a cost that the funeral home must account for when accepting payment. When comparing funding companies, ask whether the quoted percentage is calculated on the net funeral bill or the total assignment amount. The distinction can affect the actual cost.
The card comparison is the useful one, because every funeral home has already decided what to do about card fees. Nobody agonizes over that decision anymore; it was made years ago, and it gets applied on every card the funeral home runs. There are two choices, and they’re the same two here.
- Absorb it: Many funeral homes absorb credit card processing fees as a cost of doing business. A funeral home that does the same with an assignment funding fee is making a similar decision. It receives the funeral bill amount less the funding fee, without waiting for the insurance company to process the claim.
- Pass it through: Some funeral homes may choose to charge the family for the cost of assignment funding rather than absorb it themselves. Before doing so, funeral homes should confirm how the charge must be disclosed and whether it is permitted under applicable state law and the FTC Funeral Rule.
The In-House Version of the Math
A funeral home that processes assignments itself pays no outside funding-company fee. It carries the receivable until the insurance company pays, which can take weeks or months. Someone on staff files the claim forms, chases the carrier, and fields the beneficiary’s calls about the balance. The cost of handling an insurance assignment in-house is the wait: the funeral home finances the funeral out of its own accounts until the carrier pays. None of that is wrong, and many fine funeral homes do it. The fee is simply the price of not doing it.
We carefully verify each claim before providing funding to minimize the risk of a denied claim. If a properly verified and funded claim encounters an unexpected issue with payment, we work directly with the insurance carrier and keep the funeral home informed while we pursue a resolution.
Assignment Funding In-House or Through a Funding Company
Funeral homes handle assignments two ways, and both are common. Some process them in-house on their own internal forms. Those forms typically direct payment to the funeral home without granting a separate power of attorney to a funding company. So the carrier’s forms, the filing, and the follow-up stay with the funeral home or the family. Others send their assignments to a funding company along with their at-need claims. Funeral homes have partnered with assignment funding companies for decades, and the arrangement is routine and trusted across the profession.
The primary difference is how quickly the funeral home receives payment and who handles the carrier’s claim process. We’ve written separately about the assignment form itself, and about how to choose among funeral home funding companies, for directors weighing the second path. For the first, the honest summary is short. A funeral home that processes assignments itself is carrying a burden that doesn’t have to be its own. Working with an assignment funding company allows the funeral home to receive payment on a verified claim without waiting for the insurance company to process the payout.
Whichever path you’re on, the people to ask are the people who do the work. For a funeral funding service like ours, that means the partners, and they answer their own cell phones.
Final Thoughts
Assignment funding is a funeral home’s receivable, moved. The claim is the same claim, and the policy is the same policy. The beneficiary remains entitled to the policy proceeds not assigned toward the funeral expenses and applicable fees. What changes is whose books the wait sits on while the insurance company processes it. As for the fee, it’s a card fee the funeral home already knows how to think about. The decision is the one it has already made about cards.
If you’d like to see how a claim moves through our system, register an account and look around. Once your account is approved, you’ll have access to the Claim Dashboard and Form Downloads library at no cost or ongoing commitment. As you begin submitting claims, you can follow their progress through funding and final payment. The partners’ cell numbers come with it.
The insurance company becomes our wait, and the family’s funeral stays on your timeline.
