Alternatives to Funeral Plans

Review of Alternatives to Funeral Plans

There are several ways you can look at as alternatives to buying a proper funeral plan, and here are some:

ISAs v Funeral Plans

ISAs offer almost tax free savings and can be a good savings vehicle, but their value will fluctuate and most providers with require a grant of probate before they will release funds – which could take 3 to 9 months.  You can have regular savings ISAs and lump sum ones, and you can have Investment Trust, Unit Trust or other types of savings, but the same comments apply – only the tax efficiency and volatility will vary up and down.

Our Verdict:
Guarantees: 0/5
Inflation Proofing: 2/5
Security: 2/5
Penalties for non payment:  5/5
Help with arranging the funeral: 0/5

Life insurance policies v Funeral Plans

These days it is quite hard to get an IFA to arrange small policies as it costs them just as much to do as a large one, so they have to charge you the same fee. This has left the door open to a special type of life insurance policy which is not regulated in the same way, the Over 50’s Plan.
Typically, they are good value if you die after 2 years but the longer you keep them the more likely you are to have paid in more money than it will ever pay out, and the insurance company benefits from all the interest.
Worse, if you miss payments or or want you cash back, you will have lost everything, so a few months illness just before you die when the bank stops paying could mean no pay out at all.
There are worse and even worse versions of these plans, but in our opinion they would not even exist if UK Financial Services was competently regulated.

Our Verdict:
Guarantees:   2.5/5
Inflation Proofing:  0/5
Security:  5/5
Penalties for non payment: DIRE
Help with arranging the funeral:  0/5

Bank or Building Society Savings accounts v Funeral Plans

The Bank May Pay for Your Funeral

The Bank May Pay

At the time of writing, you won’t get a great deal more than 2% return on long term savings. This means that you savings will typically fall between 3 and 5% further behind the cost of funeral every year. At just 3%, you would have lost nearly one sixth of the cost of a funeral over as little as 5 years, leaving your family to find the shortfall.

If you do decide to use this route, you should set the account up with a 100% trustworthy friend or relative in joint names: that way they can access the money at any time to pay for the funeral (or, of course, go on holiday!)

Our Verdict:
Guarantees:  0/5
Inflation Proofing:  1/5
Security: 3/5
Penalties for non payment: None
Help with arranging the funeral: 0/5

Paying from your estate v Funeral Plans

Funeral costs can be paid from your assets. However, funeral directors prefer to be paid immediately! Should their be enough money in a bank account, the bank will usually agree to pay for the funeral from that account but ONLY if the funeral director sends the bill direct to the bank and the bank have had a copy of the death certificate. If a family member or friend pays it first, they will NOT refund it and the cash won’t be released until probate is granted, assuming it is required.

This method is risk as the money has to be there, the bank has to cooperate, and everything has to be done correctly.

Our verdict:
Guarantees: 0/5
Inflation Proofing: 0/5
Security: 0/5
Penalties for non payment: Family left with whole bill
Help with arranging the funeral: 0/5

Funeral Plans

Prepaid funeral plans are all very different, but they all offer some level of guarantee that most of the costs around a funeral will be paid, unlike all of the other methods. Because they are so different, and the company salespeople are NOT going to point out the disadvantages of their own funeral plans, independent advice is essential, so you really should contact the team at the Prepaid Funeral Review before making any arrangements – we are 100% independent, and on your side, and we are constantly researching the market.

Our Verdict:
Guarantees:  4.5 / 5
Inflation Proofing:  4.5 / 5
Security:   4.5 / 5
Penalties for non payment:  4 / 5
Help with arranging the funeral:  5 / 5

Review of Alternatives to Funeral Plans.

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