What You Need To Know About Funeral Plans
- May 3, 2017
- Funeral Planning
- by Chris
For many people, a funeral plan is a practical way to deal with the cost of a funeral. A funeral plan can make good sense if your family would struggle to pay for your funeral or if paying for your funeral out of the cost of your estate would leave your family with a smaller inheritance than you would like.
A funeral plan allows you to pay for your funeral now. It means your relatives don’t need to pay for the cost of the funeral themselves or take the money to pay from it from your estate, which would leave them with less inheritance than you would like.
When you buy a funeral plan, you are paying for the cost of a funeral as it would be at today’s prices.
You can pay for your funeral plan in one lump sum or you can choose to pay it in instalments over a set period of time. Our advice is to pay for your plan as quickly as you can without leaving yourself short of money. This is because the longer you take to pay for your plan, the more it will cost in interest payments.
What does a funeral plan include?
It is important to note that a funeral plan will cover many of the costs of a funeral, but it will not cover all of them.
Different providers include different items in their funeral plans. For example, some will cover the costs of cremation, others will only make a contribution. It is important to read the details of your policy carefully so you can be sure you know what is included and what isn’t.
Typically, a funeral plan is only likely to include the costs that are associated with the funeral director. This means the cost of flowers and catering will not be included. These will need to be paid for when the time comes. If you would like to be buried, it is unlikely that the cost of purchasing a burial plot will be included either.
Are funeral plans safe?
Like any financial investment, you want to be sure your money is going to be safe.
The Financial Conduct Authority does not directly regulate funeral plans. However, your provider will invest the money you have paid them into a trust fund or an insurance policy that will pay out when you die. Both trust funds and insurance policies are covered by the Financial Conduct Authority.
There is also an organisation called the Funeral Planning Authority (FPA). If a member of the FPA goes out of business, the FPA and its other members will step in to look into paying for the funerals of the customers of the company that has gone out of business. Membership of the FPA therefore gives an extra level of peace of mind.
If you pay for your funeral plan with your credit card, this will also give you some protection. This is because your purchase is protected under Section 75 of the Consumer Credit Act 1974. Your credit card provider must protect purchases over £100 if there is a problem with goods and services you have bought, or if the company you have bought them from goes out of business.
What are the alternatives to a funeral plan?
The traditional way to pay for a funeral is out of your estate. Your bank will normally release the funds if they have an itemised bill from the funeral director and a copy of the death certificate.
However, if you would like to take care of the costs of your funeral now, there are several other options you can consider apart from a funeral plan.
Over-50s life insurance
Over-50s life insurance pays out a fixed lump sum to your family when you die. Unlike many forms of life insurance, you are guaranteed acceptance, which can be useful if you have a medical condition that would normally mean you would be refused.
However, it is important to know that the lump sum does not increase with inflation. This means you could find yourself paying more in premiums than your family receives when you die.
A traditional savings account is a simple route to take. You will need to make sure you set it up as a joint savings account with someone you trust. This will enable them to access the money more quickly and easily after your death.
However, it is important to know that the cost of funerals has been rising rapidly in recent years – research suggests the cost has doubled in the past ten years. You will need to make sure that your savings are increasing at a rate that can keep pace with this.
How do I get a funeral plan?
UtilitySavingExpert’s funeral plan comparison tool makes it easy to compare funeral plans.
Start by selecting the type of funeral you would like. You can choose from four options:
•Bronze is the most affordable level. The Bronze plan offers all the necessities of a traditional funeral within your means.
•Silver is the most popular level. It offers everything covered in our Bronze plan but with the benefit of third party costs.
•Gold is the perfect level for those who require all the essentials but wish to include a limousine for family members.
•Platinum is the superior level. It provides all the essentials of our other plans but with two limousines and superior coffin.
Next, fill in your details.
We will then give you a call to discuss the funeral plans options that are open to you and help you choose the one that’s right for you.
It’s as simple as that! Start to compare funeral plans now.