Funeral services and merchandise purchased today for future use, sometimes years from now, can be essentially locked in by funding the arrangements in full now. This is done by placing the money into a financial product that will grow on an annual basis. The growth of the insurance policy or trust fund accrues and this growth is what offsets inflationary increases and is paid to the funeral home only after they provide the services.
Let's say you pay for a funeral now for $7,500 and then live another 20 years. If the contract was guaranteed, the $7,500 plus the growth goes to the funeral home to cover the 2035 costs of the funeral and services. As long as the family does not change the services or merchandise, they would owe no additional money. Money set aside for products or services provided by others, such as flowers and cemetery charges, cannot be guaranteed as we have no control over these costs.