What is a Funeral Plan?
With the average cost of a funeral last year standing at over £3,590, many of us worry about how those we leave behind will be able to cover these costs when we die. And that is why funeral plans exist, to allow us to pay for and arrange our funerals so that everything is in place when it is needed.
What Do Funeral Plans Cover?
In short, these are prepaid funeral plans and they guarantee to cover the cost of the funeral director’s services and pay an allowance for third party charges (terms and conditions apply) such as cremation or burial costs, and doctor’s and minister’s fees.
While policy features and benefits may vary depending on who you buy the plan from and the particular level of service you choose, typically they may cover some or all of the following costs:
- Cremation or burial;
- Choice of local independent funeral director;
- The coffin;
- A hearse and limousine for the family;
- Funeral directors fees and services;
- Conductor and pallbearers on day of funeral;
- Transportation of the deceased prior to the funeral;
- Registration, documentation & certification advice;
- Family viewing at the chapel of rest;
- Service at local cemetery/crematorium;
- Full listing of floral tributes;
The benefit is that with this plan in place, you make the funeral process a lot easier for your family by having all the arrangements (and your wishes) taken care of for them.
Also, by paying for your funeral via a funeral plan, the costs will be frozen. This means no matter if you die 5 years or 30 years after you take out your plan and no matter whether the funeral costs have doubled or tripled, you will still get what you paid for, at no extra cost.
How do they work?
There are several funeral plans on the market, many offering different levels of cover. This enables you to select the plan that most suits your needs and your budget. The differences in the levels of cover tend to relate to the quality of coffin you choose and whether a family limousine is required.
You simply decide what level of cover you require (you can compare funeral plans if you are unsure) and how you would like to pre-pay for the costs.
Typically, you can pay by installments over 12-60 months or, if you prefer, pay in full. As at the time of writing (January 2015) you can expect to pay from £3,100 to £4,000 if you pay in full. If you want to spread the funeral costs, then you may typically be charged an administration fee on top.
Once you have selected the policy that most suits your needs, you can put all your funeral wishes down in writing, saving your loved ones the upset that comes with planning a funeral, and ensuring that your wishes are carried out.
Are funeral plans the same as funeral insurance?
No, the difference is that with funeral insurance (also known as Over 50’s insurance), when you die, your loved ones will receive a cash lump sum that they can then put towards your funeral if they so wish.
You tend to pay a monthly amount until you die – or until you reach a certain age (with many providers, this is aged 90). The amount your beneficiaries will receive is based on your age when you die, whether you have paid in to the plan for a few years or 30 years.
That means that if you live a long life, you could end up paying more in premiums than your family will receive upon your death.
Funeral insurance plans are popular as the monthly amounts tends to start quite low – around £10-£15 a month.
Peace of mind
No one likes to think about dying, but having some form of funeral plan in place may give you the peace of mind of knowing that your family can say their goodbyes to you, without having financial worries