Types of prepaid funeral plans: the market has become a lot more complicated with companies introducing new plans which include less and less just to keep the cost down. Make sure you REALLY understand what you are buying. Best way is to call us! What follows is a very basic description of the types of plan available and a general guide to what to look out for, and what to avoid as far as possible.
Pre paid funeral plans come in varying types, and marketers try to confuse the public into thinking that Over 50s Life Insurance is the same thing. It is not. A pre paid funeral plan is specifically designed to pay for a funeral, and makes allowance for cost increases. A typical Over 50s policy just pays out a lump sum which will be worth less each year as inflation bites. Worse, you can lose the total investment if you miss a couple of payments. Of course, you can buy a proper pre paid funeral plan on a monthly basis too, but once it is paid for, it is paid for!
All of the issues below we are happy to discuss with people who come to us for advice, on the understanding that they arrange the plan through us of they take our advice. Give us a ring on 0800 0588 240 or use the form to the right to organise a chat.
With a pre paid funeral plan, the funeral directors fees are normally guaranteed. On top of that (in most plans) is an essential allowance for third party costs such as the crematorium, perhaps doctors fees and minister or celebrant. That allowance is normally index linked – but not always. The fund is ring fenced with the specific purpose of paying for your funeral, either through a Trust Fund or a special fund with an insurance company.
So having established that the way to pay for a funeral is through a pre paid funeral plan, what types are there and what pitfalls should you look out for? Starting with the cheapest type of plan, we’ll build up a picture to help you decide which type of plan is right for you.
With this type of plan the undertaker collects you and that is the last anyone will have to do with the funeral. Friends and family will have no further involvement, and that can be very upsetting if it is unexpected, and the executor will get the brunt of the backlash. Once the undertaker is called, it is too late to change anything. This type is fine as long as the family know in advance.
Things to watch out for: there is often an additional charge for people who die at home.
2) Funeral Directors Fees Only Pre Paid Funeral Plan.
These have their place in the market, provided that both the seller and the purchasers family understand what the plan covers. And that is only the funeral directors basic costs. The cost of cremation or burial, doctors fees, and service costs are all things the family will have to pay for at the time. At the time of writing, for a cremation, these costs are likely to be around one third of the total cost. For a burial, potentially far more.
These are a useful start for people who can’t afford a full standard pre paid funeral plan, and most can be added to later on, though at current prices. They are also useful for people who already have an Over 50s Insurance, who need to top up as the value of their policy decreases.
2) Cut Down Pre Paid Funeral Plan. Tricky new kid on the block.
These are similar to standard plans below but seek to cut funeral costs by limiting where and when the cremation can take place. Cremation costs before 9.30 or after 4.30 are usually much cheaper. Costs are further cut by not allowing a choice of undertaker. The undertaker could come from 30 miles away, in an extreme case, and they get to chose the crematorium (on a cost basis) which could be another 20 miles away. And everyone has to get there for a service at perhaps 8.30 or 9 a.m. You can see why they don’t suit everyone – we much prefer to recommend the slightly more expensive standard plans. That said, there are a very few decent ones on the market.
3) Standard Pre Paid Funeral Plan.
Here all the basic costs are allowed for. Funeral directors fees, cremation, minsters and (sometimes) doctors fees. If it is a burial, then there is an allowance towards the opening and closing of a grave. These are the plans we recommend for most people – why pay for things which may not be needed? If you cover the crucial costs, the family can add and pay for extras at the time. But that is just us!
4) WARNING: no pre paid funeral plans includes the cost of buying a grave.
You can add an allowance towards it, but the availability and cost of graves varies enormously. Buying them in advance may or may not work – many are only leased to your of (say) 30 years, so the lease could run out before you do! And you may move, and clearly, the grave won’t move with you.
5) Mid Range Pre Paid Funeral Plans.
These usually add a limousine for the family to travel in, and sometimes a slightly posher coffin.
6) De Luxe Pre Paid Funeral Plans.
Generally, they add a second limousine and a posher coffin. Sometimes they will add a spray of flowers or an order of service and a few other minor trimmings.
7) Bespoke Pre Paid Funeral Plans.
Some providers allow us to add an allowance for pretty much anything into a pre paid funeral plan from picture coffins to ashes being made into jewellery to space flights for the ashes!
8) Environmentally Friendly (Green) Prepaid Funeral Plans.
Many of the funeral plan companies offer these. Some are surprisingly “un green.” Some companies charge a fortune for simple deviations from standard plans.
9) International pre Paid Funeral Plans.
These are often important to people who may live abroad some of the year, or who expect to return to the UK before they die. It is a specialist area and it is important that you mention this aspect to us if it is relevant.
Whatever your needs, please do get in touch. Somewhere in the market, there will be a plan that is right for you! Use the form to the right or call 0800 0588 240 7 days a week 9am to 9pm.