The benefits & drawbacks of prepaid funeral plans
The thought of planning your own funeral can seem a bit depressing at first. But despite this initial reaction, taking out a prepaid funeral plan is a useful way to ensure that you don’t leave your friends or family in a difficult financial situation when it comes to your send off.
There are many reasons why prepaid funeral plans suit some people, and also good reasons why there may be better options for you personally. We’ll take you through all the pros and cons.
Funeral plan benefits
Fix the funeral cost at current prices
With the average cost of a funeral in 2017 standing at £3,784, and the cost of dying having risen for each of the past 14 years, one of the most attractive funeral plan benefits is that it fixes funeral costs at current prices, protecting you against inflation. However, this is commonly only the case if you’re taking out a funeral plan when you’re over 50.
There may be an inflationary impact in terms of any extra money for third parties and decorations such as flowers, but the central costs such as the coffin, ceremony, and burial/cremation are guaranteed to be paid for from the plan at the price you agree.
No Medical Exam Needed
Another funeral plan benefit is that it is very easy to set up. Unlike with some life insurance policies, you won’t be subject to any medical checks, so you can get yourself coverage and start paying for your funeral very quickly.
Make sure your funeral goes as you want it to
Taking out a funeral plan means you can arrange all the details of your funeral in advance, ensuring you can make a decision about every part of the day that matters to you. You’ll be able to talk to your funeral director about exactly what you want, from the type of service, to what the casket is made from.
Nobody is going to know your wishes as well as you do, even closest members of your family who the job of planning your funeral will likely fall to if you don’t make what you want clear.
Save your family emotional and financial stress
Planning and paying for your funeral in advance removes the burden from your family of organising everything while going through the grieving process. In addition, they won’t be left with a large amount of money to pay all at once, as you’ll have handled the finances in advance through a series of payments into your funeral plan.
Available for older people
Unlike life insurance policies, which typically have an upper age limit, you can find prepaid funeral plans which you can take out no matter how old you are (although not every company offers these plans). This means that you don’t have to worry about being ineligible for cover, so whatever your health and age you can find a plan to suit your needs.
You can also take out a funeral plan early in life, but usually you won’t benefit from the fixed price guarantee that comes with plans taken out when you’re over the age of 50. If you are younger it’s a good idea to consider < a href="https://purecover.co.uk/life-insurance">life insurance[/link] as an alternative to a prepaid funeral plan.
Funeral plan drawbacks
Relatively Small Pay-out
It is important to understand that a prepaid funeral plan isn’t a life insurance policy. It isn’t going to pay off your mortgage or other debts. Neither will it give your family a big pay-out. In a way, a funeral plan is like an organised savings account: you pay instalments and once you have paid all the money into the plan it remains there and is paid to the funeral director after your death.
As long as you look at it in this way there will be no problem. However, bear in mind that you may end up paying in more than comes back out, as the longer you select to pay off the plan (i.e. the lower you set the instalment payments), the more you will have to pay overall.
You have to pay more for increased flexibility
The lowest cost plans will commonly have restrictions on things such as the quality of the caskets you can select from, and the days that can be chosen for the ceremony. If you take out the most basic package it will not include your family being able to hold your funeral on a weekend or bank holiday, and it’s likely not to pay anything towards decorations or extra travel arrangements other than transporting your body.
Funeral plans have many tiered levels of payments, and if you’re willing to part with more money then you can get plans that include things such as limousines for your family and an allowance to help people travelling from far away.
Prepaid funeral plans don’t commonly include purchasing a grave
While your funeral director can help you with this, if you plan to be buried rather then cremated then a funeral plan will not typically cover the cost of the burial plot. You can find certain plans that do offer this option, but it will lead to a more expensive plan.
Cover stops if you stop paying
Depending on the provider, after a set number of missed payments your plan is likely to be cancelled. In this case it is common for all the money you have paid in up to that point to be returned, but some insurers may charge a fee for this.
If your plan gets cancelled, then you’re likely to find starting a new plan will be more expensive as funeral costs are likely to have risen further in that time. Once you’ve started a plan you want to make sure you pay it in full, and contact your provider if this is looking at all difficult for any reason.
Where can I get a prepaid funeral plan?
If you’ve read through these points and decided a prepaid funeral plan is right for you, great! The next step is obviously finding the best one around. Our reviews will take you through what each provider offers in detail so you can make an informed choice and get the right prepaid funeral plan for you.