You may often hear the term ‘funeral plan’ bandied about, especially on TV advertisements. What is important to realise, however, is that this term can be used to encapsulate several different types of funeral financial planning products.
So, if you are considering funeral plans, then it is vital you research the different types of plans available, to see which one is most appropriate for you.
There may be some products that better meet your needs than others – for example, if you just want a form of funeral plan that will help towards the costs of you being buried or cremated – the average no-frills UK burial costs around £4,000, an almost 20% price increase in the past three years – then an over 50’s life insurance policy may appropriate for you.
So, what are your funeral plan options?
Prepaid funeral plan
With the cost of dying increasing faster than the rate of inflation, prepaid funeral plans are a way to remove the financial and emotional burden from your family.
A mid-range prepaid funeral plan can cost from £3,559*. You simply pay a lump sum or monthly payments to your chosen funeral plan provider over a set period (anywhere between one and 25 years), and this ensures an inflation-beating way that the bulk of your funeral costs are covered no matter when you die.
Note that we say that the ‘bulk’ of your funeral costs will be covered. This is because some prepaid funeral plans guarantee to cover all the costs when you die, while others may only guarantee to cover the funeral director’s costs. That is why it is important that you understand fully what your plan entails.
Direct cremation plans
Direct cremation plans are a fairly new addition to the UK personal finance market. These are where the body goes straight from the undertaker’s to cremation. There is no service, leaving families free from worry of having to make the usual funeral arrangements, as well as the upset of the actual funeral service. If they so wish, they can arrange a celebration of Life event or similar afterwards.
You can request that the ashes are returned, so your loved ones can scatter them or keep them.
Direct cremation plans are even more cost-effective than prepaid funeral plans, starting at just £1,595*, and again, protect those you leave behind against rising cremation costs.
Over50’s life insurance plans
Over 50 life insurance plans are often touted as funeral plans but are in fact, a form of life insurance. Costs start at £3.72* a month, and anyone aged 50 -85 can apply for the cover. Acceptance is guaranteed – so even if you have been refused life insurance elsewhere, perhaps due to a medical condition – you can still get an over 50’s life insurance plan.
The sum your loved ones receive when you die won’t be in the hundreds of thousands of pounds – more around £10,000-£20,000 depending on your budget.
The important thing is, this money takes the strain off your family, and it can be used to pay towards your funeral costs or to leave a small legacy.
In summary, you can there are many funeral plan options. Hopefully, this brief article will help you make an informed decision as to what plan may be the most suitable for you.
* All costs correct as at the time of writing (July 2018)