Funeral Plans & Funeral Insurance

Funeral Plans & Funeral Insurance

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Is Funeral Insurance Right for You?

Grieving the loss of a loved one is enough without having to deal with financial burdens on top of it all. Even putting money in a savings account is not enough -- it goes quickly when your family has to cover all the costs of your passing on their own. If you don’t have funeral plans in place to cover the costs of your passing, you should consider a policy that will cover funeral plans.

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Funeral plans explained

The ‘cost of dying’ has risen year-on-year in the UK for over a decade, and the average cost of a funeral last year was £3,784. The majority of people don’t have that kind of money just lying around, so taking out a prepaid funeral plan enables a person to pay for the cost of their funeral while they’re still alive in order to take the financial strain off those left behind.

When you arrange a funeral plan, you can pay for it either in instalments or one lump sum to a plan provider or directly to a funeral director. We’ll take you through all the details right here, and also explain the important distinction between a funeral plan and funeral insurance - which are often mistakenly thought of as being the same thing.

What is a prepaid funeral plan?

A funeral plan is basically an insurance premium that covers the cost of your funeral in advance. You usually pay monthly instalments for a set term, and that money pays for the funeral (or at least some of it) after you’ve gone. This sum is usually for a fee in the region of £3,000 - £5,000. Agreements are usually between 1-25 years, but there is also usually the ability to pay it all off in one go.

Once you have paid the entire balance off, the plan remains in place until you die, and is guaranteed at least to cover the basics (casket, service, burial/cremation) at the prices available when you took out the plan. This means your family won’t find the money has become insufficient due to inflation over time.

Funeral plans are often promoted to over 50s, but can be used by applicants of all ages and backgrounds.

What does a funeral plan cover?

A funeral plan usually won't cover all the costs involved in a funeral. However, all plans are designed to cover the basics, and most providers have a range of different plans at different prices that include extra features and more cover.

You can typically expect all of these things to be covered, and at guaranteed prices to avoid inflation:

  • A basic casket/coffin.
  • Transportation of the body.
  • The funeral service.
  • Care of the deceased person until the funeral.
  • Professional advice and services for planning the funeral.
  • Provision of staff to attend the casket/coffin.

These features are not usually included in basic plans, but can typically be added to a plan for increased cost:

  • A burial plot.
  • Flowers for the funeral.
  • Catering at the reception or wake.
  • Transport for extended family.
  • A funeral procession.
  • Ability to choose any day for the service (you usually have to pay extra to have a funeral on weekends or bank holidays).
  • Extra money for third party costs.

Value packages that aim to offer you a lower price might place restrictions on some elements of the funeral, such as what day it is held or the choice of coffin/casket.

What are the benefits of taking out a funeral plan?

There are a host of reasons you might consider taking out a prepaid funeral plan. Here’s a selection of their most attractive features:

  • You can cover the costs of the funeral at today’s prices, avoiding future inflation rates.
  • They allow you to remove the threat of inheritance tax causing issues as the money pays directly to the funeral director.
  • It keeps your family from financial stresses and organisational headaches.
  • Acceptance is guaranteed regardless of age.
  • There are no medical checks required.
  • Funeral plans enable you to make sure that your funeral goes how you want it to by choosing the specifics in advance.

What If I die before the plan is fully paid?

In this case, most companies allow your family to cancel the plan and receive a refund minus admin costs. But some may ask the family to pay the remaining balance to receive the full costs, so these factors need to be considered.

Always check the details of any plan you are taking out. Our reviews will guide you through all the details, and it is important that you understand a policy fully before starting to pay for it.

Is my money safe?

Yes. Providers put money in trust funds and insurance policies and keep your money safe. Unlike with an insurance policy, there aren’t different criteria and exclusions for if a plan pays out - upon your death your funeral plan will pay your funeral director for your funeral (or part of it).

The Funeral Planning Authority (FPA) is an organisation dedicated to making sure prepaid funeral plan providers adhere to a code of practice, ensuring that the money you have paid into a funeral plan is well managed and kept safe. Customers can also use the FPA to access independent dispute resolution if there’s any problem with a plan.

If you want additional protection, paying for your plan on a credit card or putting up at least £100 up front will give you coverage under the Section 75 of the Consumer Credit Act.

What is the difference between funeral plans and funeral insurance?

In addition to funeral plans, you can also consider funeral insurance, which is also called over 50s life insurance. Some people confuse these kinds of policies as being the same as funeral plans, but they function very differently.

Over 50s life insurance is a life assurance policy (meaning it lasts your entire life) which is designed to pay out a fixed amount when you die to cover the cost of a funeral. You pay monthly premiums usually until around your 90th birthday and a lump sum is paid out to whoever you name as the beneficiary of the policy upon your death.

A prepaid funeral plan functions more like a savings account: you pay money into the plan until the full value has been paid. At this point it remains in place until you die and the money in the plan is paid directly to your funeral director who arranges the funeral. The money goes right where it needs to, rather than being paid to your family and leaving them to sort out the details.

Some people caution against taking out over 50s funeral insurance, as the long term nature of the premiums and relatively small cash benefits mean that it’s possible for you to pay much more into the policy than it will pay out to your family.

Prepaid funeral plan Funeral insurance (over 50s life insurance)
Set cost with option to pay in instalments Life assurance plan with monthly premiums
Your plan is secured once all payments have been made You need to keep paying premiums until you pass away (or until you reach your 90th birthday)
You know exactly how much you will pay You could end up paying in more than is paid out

How can I find the right prepaid funeral plan?

That’s where we come in. Here at Pure Cover we review all the options for you so you have all the information about every plan and can make an informed choice. So, if you want to know about each plan in full, then head to our reviews and we’ll take you through everything to find you the best prepaid funeral plan.

If you are looking to find a plan ASAP, then click the link below and we’ll get you a quote in minutes.

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