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Should You Have a Funeral Plan?

It can be rather confusing trying work out what a funeral plan is, what it covers and if you should have one. Hopefully we can dispel some of the confusion so that you can make an informed choice.

How much does a funeral cost?

The cost of a funeral changes from region to region. It also depends on the type and style of the funeral. For example, in Scotland the average cost of a funeral is £3,716, in London its £5,529 and in the South West it is £4,011. There is also a price difference in a cremation to a burial. The average cost of a cremation funeral is £3,437 and the average cost of a burial is £4,356. As you can see there is quiet a difference.

What is a pre-paid funeral plan?

A funeral plan is simply a way that you pay for and arrange your funeral before it is needed. You also get to pay current prices and when you consider that since 2004 funeral costs have more than doubled to an average of £4,000 that can only be a good thing. You could save your family a large sum of money and remove some of the stress from your family of having to arrange everything.

A funeral plan in general will guarantee to cover the cost of the funeral director’s fees and will either include an allowance for or cover the cost of a cremation or burial fees. Each plan is different so do check what is and isn’t included.

How does a prepaid funeral plan differ from a funeral insurance policy?

A funeral insurance policy can be either a pre-paid funeral, like we have just talked about, or a whole life insurance plan which pays out a lump sum of cash to the family at the time of death. The lump sum can be used to pay for anything and the funeral would cost the then current cost of a funeral. If you are wanting to save and for your money to go further than a pre-paid funeral plan would be what you are looking for. A pre-paid plan also contractually ties in a funeral director. So, when its time one call is all that is needed to start the organising. This can elevate a lot of stress and worry for the family.

How much is a prepaid funeral plan?

The cost of a prepaid plan does depend on the company you choose and services you opt for. As a guide a standard plan can start at £3,300 with a superior plan at about £4,200. Things like the quality of the coffin and use of a limousine for the family can later the price. There can often be savings by having certain limitations in place like restricting the time of the cremation to early morning or late afternoon or not including fees towards cremation.

Each pre-paid payment plan is different so do check the details as to what is included and what is not included.

Is my money safe, who regulates funeral plans?

Pre-paid funeral plans are currently not regulated by the Financial Conduct Authority, FCA. There is no law that they must be regulated. But since 2002 there has been a UK regulation body called the Funeral Planning Authority, FPA, that isn’t compulsory to join. Companies can choose to register with the FPA and once joined show that they operate in accordance to the high standards set out by their Rules and Code of Practice. They are then re-tested each year.

If you would like to save your family money on the cost of your funeral and elevate some of the stress then a pre-paid funeral plan could be your answer. You also have the option to pay in a payment plan or pay a lump sum.