Category Archives: Insurance Based Plans

Insurance Funeral Plans SLAMMED by Daily Mail & Which?

The Daily Mail & Which? Slam Insurance Funeral Plans

“The insurance funeral plans that pay out LESS than you’ve saved”

goes the headline.   The implication of the article is that insurance funeral plans are poor value and you would be better off saving in a building society.

Funeral Plan Quotes

Funeral Plan Quotes

There is certainly an element of truth in that.   The problem is that if you save £10 a month for 2 years plus a day, and then die, you would have saved £240 with a few pence interest. That won’t even buy the casket!  If you had bought a “bad value” insurance based plan, you would have created a payout of around £2,000 which might pay for a basic funeral if you shop around.  Well, if your relatives shop around!

So insurance funeral plans are good value if you die early (but not too early, or there will just be a refund of premiums paid.)   However, if we use the example published in the Mail (page 47 on 16th May 2012) of buying the insurance at age 64 and dying 26 years later, you would have paid in around £3,12o.

What would you get back?  According to the article Axa Sun Life Over 50 plan would pay out less than half that amount!  Foresters, Aviva, Asda, Tesco, Legal and General, and Sainsburys are even worse.  Top payer would be CUNA Mutual followed by Shepherds Friendly and Engage Mutuals Funeral Plans.

When you bear in mind that your savings would have earned some interest too, the benefits of the life insurance element of insurance funeral plans have to be pretty high to make them good value.

Here at the PrePaid Funeral Review, we rarely recommend insurance based funeral plans except in very rare circumstance (and we’re not giving away trade secrets on the site!)

However, they do have a place.  They are just massively oversold and massively misunderstood – I would argue that their sales pitch is rather misleading because the public just don’t take the trouble to really understand what they are buying!  According to the Daily Mail, nearly half a million people bought these plans last year.   We reckon that more than half of then should have bought a proper prepaid Funeral Plan – and perhaps there are a million who still should still cut their losses and buy a full funeral plan.  Click the link to enquire!  But don’t expect anything back from the old insurance based plan.

Originally posted 2012-05-16 19:34:07.

Funeral Insurance

Funeral Insurance Plans

Funeral insurance is not the same as a prepaid funeral plan. With normal life insurance, you might have to undergo a medical exam, while “funeral life insurance” companies will not subject you to that.  Some insurers load (increase) the premiums OR don’t pay out until you have survived – typically – 2 years. That makes funeral insurance a gamble, in our book.  But sometimes it is still the right thing to do.  We review every case on its’ facts.  But worse is to follow with many…

Funeral Insurance pay, pay and pay some more…

Funeral Plan Quotes

Funeral Plan Quotes

Additionally, you will often have to continue to pay for insurance for your entire life, and you may well end up paying more than your funeral actually costs. With many funeral plans, there are no age restrictions, unlike many insurance companies. If you miss a couple of payments, most companies will make no refund, and no payment whatsover when you then die.

What is better than funeral insurance?

Funeral plans are a very easy idea to understand, and you can either pay for the funeral in full at the start. Alternatively, you can pay whatever you can afford as a deposit with monthly payments over a year or up to 10 years.  One year schemes are usually interest free.

When your funeral arrives, you have a paid for the funeral services, and your family will incur little to no expense as a result.  They might need to pay a little bit in some cases, that that is much better than having to find several thousand pounds unexpectedly. Generally speaking, flowers and catering are not included (but you can add funds to make an allowance for them if you wish.)  But one of the reasons the Prepaid Funeral Review team are so important to making a wise choice is that some plans leave out vital things – such as the actual funeral.  So our independent professional advice is really comforting to folk determined to make life as easy as possible for those left behind.

Funeral Plans Gives You Peace of Mind, in addition to removing the future cost burden on your family members.

If, like me, you have seen families argue and fall apart over funeral arrangements, you can also use funeral plans to reduce their stress during an emotional time. When we organise your funeral plan, you often have several different options. Many companies will have a basic plan, which might include a simple coffin and no service. They might have a standard plan including a posher coffin, transportation and a service. The premium plan may include even more things such as a second car. Most funeral plan providers also allow you to pick and choose what you want at your funeral. What this means for you is that get to choose what you want included at your funeral. Perhaps a special kind of flowers?  A favourite song? Any detail that you wish can be added into your funeral plan. This way, your family members will not be able to fall out over what you would have wanted, and the already ultra stressful situation will not be even harder.

Funeral Plans save you and your family money and extra grief.

Many funeral life insurance companies will offer funeral plans based on the cost of a funeral when you invest in your plan. Funerals are expensive, and the prices continue to rise at above the rate of inflation each year. This means that your death can leave your family with a large financial burden. By purchasing a pre paid funeral plan, rather than a conventional insurance policy, you are saving them from the high costs of a funeral. Even if the prices have risen massively, your family will not have to pay the difference on the main items. By purchasing a funeral plan instead of funeral insurance, you are also saving yourself from paying ongoing premiums. If you are interested in finding a company that sells funeral plans, but the right ones for you, you have come to the right place – we can help find the most suitable plan for you

Funeral insurance if you still want to know more, click the link!

More on funeral insurance.

There are three types of life insurance which the public think of as funeral insurance, though it is rarely advertised as such as it isn’t.

  • Term insurance – this type of policy last for a specific number of years and then finishes with no cash value.   If you miss payments, then most policies will be cancelled and you will get nothing back.  If you die after the policy finishes, you get nothing.  In most case the funeral will cost far more than the death benefit which was fixed when you took the plan out  For the sake of argument, if your initial cover is for the full cost of the funeral, ten years later it will probably cover half of it with a bigger shortfall every year as inflation bites harder. Even worse are policies with a reducing death benefit.
  • Non profit whole life.  There are at least better than term insurance in that at least they will pay out when you die, if you don’t miss any premiums.  There is no investment element, so the only way to get cash back is by dying.
  • Flexible whole life: these are only sold by regulated financial advisers, so rarely appear as a funeral plan recommendations. They could be used but they are pretty complex and the premiums would have to be pretty high: but there would still be no guarantee.  We are not financial advisers, just funeral plan experts.

Originally posted 2012-02-16 21:25:29.

Life Insurance Funeral Plans (Over 50 Plans)

Life Insurance Funeral Plans (or Over 50 Plans)

Funeral Life Insurance plans (or over 50 plans)  are widely advertised on TV, in magazines and direct mail.  They look good for older people as a medical or medical evidence is not required before taking one out so your health and age don’t matter.

But if you watch or read carefully you will find that

Over 50s Life Insurance is NOT Suited for Funeral Planning.

Funeral Plan Quotes

Funeral Plan Quotes

Life insurance funeral plan policies accept all comers, which can be a plus or a minus.   Clearly, premiums will be higher than for a properly underwritten life insurance policy, and you wouldn’t have the problem that you have to live for two years (generally) after the plan has started before it will pay out.

Since you pay premiums until you reach a certain age (typically 85 or 90 – sometimes until you die), those in good health are effectively subsidising those who are not so fit

If you live too long, life insurance funeral plans can be poor value as it may not pay out as much as you’ve paid in!  On the other hand, if you die too soon it may not pay out at all.

There are two other aspects to review with life insurance funeral plans.

  1. Admin charges can take out a large proportion of small monthly premiums, making them worse value.
  2. Most life insurance plans pay out a set amount, which may be fine NOW, but could be woefully inadequate in 10 or 20 years time.  At current levels of funeral cost inflation, costs will double in around 10 years, and be FOUR times as much in twenty years.  If you pay for thirty years, funeral costs could have risen to EIGHT times the current cost.  So we strongly recommend considering a proper prepaid funeral plan if you possibly can.
  3. You will lose everything you have paid in if you no longer pay premiums – perhaps through a bank error, or because you are ill or just can no longer afford the premiums.  That could be thirty years worth of savings – gone.  Is that fair? Is it a risk you want to take?  That doesn’t happen with prepaid funeral plans.

But I already have a Life Insurance Funeral Plan!

We don’t suggest that you should cash it in, as if it is the type of plan we are describing here, you’ll get nothing back,   But what you could do is use it to provide the extras that a basic (relatively inexpensive) prepaid funeral plan doesn’t.  So contact us to add a proper funeral plan to the life insurance one.

We believe the best safeguard is to choose a pre-paid funeral plan from a company, ideally approved by the Funeral Planning Authority. This has a code of practice that members agree to and ensures that your money is held separately in a trust fund which is absolutely crucial.   You can usually add in a choice of extras to cover parties, coach and horses or whatever you wish too as well!

The crucial part of using an approved firm is that your money is kept in a TRUST, which protects it should the undertaker or pre-paid funeral plan firm go out of business, so your hard won savings won’t be lost.

Naturally, if you have a decent amount of savings, you can state in your will that they must be used to pay for your funeral which is one way try to ensure that your money is used as you would wish.  But be aware that directions to your executors in your Last Will are only regarded as being WISHES, and the executors can choose to ignore them.   A pre-paid funeral plan is a far better bet.  The life insurance funeral plans generally give you no real control at all over how your funeral is conducted.

So  we would generally recommend a pre-paid funeral plan

Life Insurance Funeral Plans (Over 50 Plans) – Prepaid Funeral Review

 

 

 

Originally posted 2011-11-30 15:37:33.

Golden Leaves The State of the Funeral Plan Market: Is Critiscism Well Founded?

(This is an interesting article – what it doesn’t emphasise is how important it is to get Independent advice on funeral plans – and we don’t think there is anyone who can match us in that respect!)

The State of The Funeral Plan Market.

Some openly aired criticism of the funeral planning industry is fair, appropriate and deserved. In fact harsh criticism in any industry is healthy, as it allows a sector to develop regulation to further improve its standards. Conversely, though, some of the over-exuberant and rather unattractive ‘bandwagon’ jumping, that the industry has witnessed particularly from some quarters of late – really hasn’t been helpful at all.

Golden Leaves Managing Director, Barry Floyd criticized media reporting of late, claiming that some journalists should be ashamed of themselves for publishing articles, some of which were so poor, that they were bordering on  “Sensationalist and scaremongering”

“It is a very sad day indeed when we see the general public being confused by a combination of poor, sensationalist and inaccurate reporting, shambolic radio shows and widespread confusion in terms of media content, as to the differences between the pre-need product and the poor value funeral insurance product. Does that mean that Golden Leaves or indeed most of the industry as a whole, is guilty of poor quality standards whilst delivering an unstable, unsustainable or poor value for money product to its clients – frankly, of course it doesn’t.

Our industry was founded by companies with pedigree, ethics and consumer protection at their very core and many of those companies still exist today and are just as reputable as they were decades ago. Golden Leaves has been pivotal in the development of the funeral planning industry since its inception in the early 1980s (being founder members of both the NAPFP and the FPA) and with this historical positioning in mind, we firmly believe that we are in a particularly credible position to deliver, quality, standards, valued products accompanied by impeccable heritage and pedigree. Golden Leaves has always had an intensely customer focused view of what constitutes appropriate sales practices and behaviour.

We refuse to work with far more sales partners than we agree to and this is testament to our robust compliance and on-boarding programmes. This fundamental approach by the brand has been clearly underpinned by a constant leadership team at Golden Leaves over the last eight years, whilst nearly all other mainstream planning companies have had several major officer appointment changes during that same period and some have even had a number of ownership changes. All this at a stage in the sector’s evolution, when it has experienced significant growth, most of which has been achieved by generating interest and sales outside of the funeral home, a channel that nearly all plan providers operate in.”

Since 2009, Golden Leaves has experienced meteoric growth that has seen its sales outstrip the performance increase of the FPA registered market over the same period by almost 400 per cent. The company’s market share has also increased to the highest point in the company’s history.

“All this growth has occurred at a time when increased market participants, operating across more varied distribution channels have made competition in the sector fierce. We are proud to say that even during these times of accelerated growth, we have not lost sight of our core principles. Our customer satisfaction rate is 99.8 percent based on our level of complaints compared against our level of sales. This is not to say that we are perfect. No brand operates without the occasional hiccup and this is why we vehemently support the increasing of the rigidity of the regulatory framework and governance provided by the FPA. Although all planning companies operate differing models, we believe that there should be a base level of quality and standards for all companies to at least achieve.”

The Golden Leaves Trust fund is fast approaching £100,000,000 with a surplus running at over 20 per cent surplus over its liabilities. It’s board of Trustees have significant backgrounds in both the field of consumer protection, trading standards and the world of financial investments; underpinning this are their investment banks Julius Baer (the world’s most capitalised bank) who have also just won the EUROMONEY award as the ‘World’s best bank for Wealth Management’ and Quilter Cheviot, one of the largest UK Investment banks that have been at the forefront of the investment sector for over 240 years.

“All Golden Leaves funeral plan funds are either placed into an insurance that is FCA regulated or an FPA regulated Trust fund providing security of funds to all of our clients. This is a position certainly not enjoyed by some other planning companies. So standing out from the sector is Golden Leaves, a company with an impeccable history and heritage. We believe we deliver a market leading product, secure and competitively priced, that protects our clients at the time of need whilst delivering significant peace of mind for their next of kin. We place our clients (our Golden Leaves) at the heart of everything we do, which is one of the reasons that our brand, that took over thirty years to build, is so trusted.”

This article was first published in the Funeral Service Times.

Monthly Funeral Plans: What Are The Options?

Monthly Prepaid Funeral Plans.

pay funeral plan monthly

Monthly Funeral plans

Not everyone can afford to pay for a funeral plan in one go, so most plans offer some sort of monthly payment plan.  You can, of course, go for the Over 50s style insurance which we dislike intensely.  But proper prepaid funeral can also be paid for on a monthly basis. With most prepaid funeral plans, monthly contributions only go on for a maximum of 10 years – then the plan is fully paid.  Even if you miss instalments you rarely lose everything unless it is very early on. Contrast that with monthly premiums for Over 50s Plans which typically have to be paid until you are 85 or 90 and where you do lose every penny if you miss payments.

Ideally, you should be able to put down some money as a deposit, to reduce the monthly cost, but not all providers insist on one.  So what are the normal offers available?

Do I need a deposit for monthly payment funeral plans?

Not necessarily, but if you have one, it gives us a wider range of plans to make recommendations from. Where a deposit is required, the typical amount is £250. Always bear in mind that you must keep up the payments, as you will lose out if you don’t.  But if you start an instalment plan, then hot financial problems, always talk to the company concerned and try to work something out rather than just getting an automatic penalty.  One company does not return any payments to the client at all!

Low cost monthly funeral plans.

Most plans can be paid in monthly instalments.

  1.  The cheapest type is the Direct Cremation Plan.  They are not really ideal, but some of them will allow you to upgrade them to a more normal plan allowing for a service later on.   That option allows for dramatically lower monthly payments.  But we need to make sure that you have a plan which can be upgraded.  In some cases upgrades can be done at almost the last minute.
  2. The next lowest in monthly cost is the group of plans which pay only the funeral directors fees.  The crematorium or burial costs have to be found elsewhere, as do ministers and doctors fees.  But again, the plans can be upgraded later. These can be used as a way of topping up one of the Over 50s life plans as they lose out to inflation – if you already have one.
  3. Moving up slightly are the new breed of cut down plans.   They are typically only perhaps £5 a month cheaper, but they seriously restrict where and when the funeral is held.  But if that fiver is more than you can stretch too, many can be topped up to the normal full plans below later on.
  4. Then we get to standard funeral plans which cover the basics.  Typically, the funeral director is paid in full.  A substantial allowance is put aside (and inflation linked) to cover crematorium fees, ministers or celebrants fees and the doctors fees.  You can allow for limousines for the family and all sorts of fancy things if you wish. But we believe that the main thing is to cover the basics as far as you are able, and keep the monthly payments at a reasonable level!

We’re happy to chat through the options, without obligation, so why not give us a call!