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If I prepay my funeral, what happens to the interest that my money earns?

If you have a prearranged funeral or burial agreement that is comprised of items that are guaranteed to be performed by the funeral home or cemetery at no additional cost to you, the interest (or growth if a life insurance policy) is retained by the funeral home/cemetery to offset the rising costs of those specified goods and services over time. That's the value of prearranging and prefunding at today's costs!