If you haven’t yet made financial provisions for your funeral, then now is a great time to put this at the top of your priority list.
Because with a funeral plan you can pay today’s going rate for a funeral and avoid rising funeral costs. The sooner you take out a funeral plan, the more money you could save your loved ones in the future.
Funeral prices are rising faster than inflation (on average +4% each year) which means the debt left behind becomes more and more significant.
The average cost of a funeral in the North West of England is currently £3,815, however future projections have forecasted that funeral costs for this region could exceed £4,500 by 2024.
Thinking about how your loved ones may cope with this financial burden, could trigger the need to take action and plan ahead for the inevitable.
Freeze rising funeral costs with a prepaid funeral plan
Funeral plans are growing in popularity in the UK – plan sales have more than doubled in the last 10 years and now over 1.4 million UK residents have prepaid their funeral.
Reassured, a local funeral plan and life insurance broker who this month opened their 8th UK office in Chester, have helped arrange almost 10,000 funeral plans for their customers, and they believe it’s one of the smartest and selfless decisions you can make.
A funeral plan ensures that your funeral debt isn’t passed onto your loved ones and allows you to arrange the funeral yourself.
If you take out a funeral plan today, then you could pay between £2,500 to £4,000 depending on the type of funeral you want to have, and then spread the cost at an affordable monthly rate over a number of months or years.
You’ll have complete control of how much is spent on your funeral so that your family can’t go overboard with the preparations.
Some funeral plan providers will guarantee to carry out your funeral services even if you pass away before the plan has been paid in full.
You usually have to pay at least 12 of the monthly instalments before qualifying for this benefit, but it means your next of kin won’t have to continue making the payments on your behalf to cover your funeral – which is the whole point of having a funeral plan in place anyway.
A funeral plan will consist of all or most the professional services required from a funeral director (collection, care and preparation of the person who has died, a hearse, a coffin, organising the funeral etc) and then some plans cover third party fees or provide a contribution towards these, which are the doctors’ fees, minister fees and cremation or burial fees.
It’s worth finding out which funeral plans will include your third-party fees to ensure that the total cost of your funeral is covered at today’s price (and these tend to be best value for money).
There are some elements that funeral plans won’t cover, such as flowers, embalming or extra limousines. Funeral plans for a burial won’t cover the cost of a burial plot either as these vary in price depending on where the burial takes place.
For example, a grave in London can set you back tens of thousands of pounds. This is perhaps one of the reasons that 77% of all funerals in the UK are now cremation – it’s just more cost-effective.
It’s important when shopping around for a funeral plan to keep an eye out for those that are approved by the Funeral Planning Authority (FPA).
The FPA are a voluntary regulator for funeral plan providers, ensuring that they are operating at a high standard and that they follow their strict guidelines.
The funds paid into your funeral plan must be held in a trust fund managed by trustees or placed into a life insurance policy, which will keep your money safe until it’s needed.
How about life insurance?
If a funeral plan isn’t for you, but you would still like to ease the financial burden of your final farewell, then there is the alternative of life insurance.
An over 50 plan tends to be the choice for many in this instance, as the pay-out can be enough to pay for a funeral with some funds left over for your loved ones to spend as they wish. Although, the cover amount won’t increase with inflation which means the value may reduce over time.
Over 50 plans are available for people aged 50 – 85 and may be suited to those who have experienced poor health, as you don’t need to provide any medical information to be accepted onto a plan. Also, the earlier you take out a plan the cheaper your premiums will be.
A pay-out is guaranteed when you pass away, and the monthly premium could be less than the monthly cost of a funeral plan. You’d pay premiums up until you pass away (or sometimes up until a certain age).
One of the main differences between life insurance and funeral plans is the long-term cost.
With a funeral plan, you know exactly how much you’ll pay because the price is fixed. With life insurance, you’re paying premiums for an indefinite amount of time.
Of course, you want to live as long as possible, but then this could mean paying more into a policy than what pays out.
The best option for you is really down to your personal budget and the needs of your loved ones.
A funeral plan allows you to plan your own funeral, which means your funeral will be exactly how you wish but also means less stress for your family.
With a life insurance policy, your loved ones could be financially protected from the expense of your final send-off but then they would still have to find a suitable funeral director and make all the big decisions for the day.
Prices for either life insurance or funeral plans can vary between providers so it’s sensible to compare multiple quotes.
It’s also important to know exactly what you’re getting for your money. You can do your own research by looking at different providers’ websites, but you could also use a broker.
An FCA regulated broker can help you save valuable time by comparing what’s available on the market on your behalf, without charging you a penny.
So why not seize the day and secure the financial protection of your loved ones?