Category Archives: Insurance Based Plans

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 installments 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?

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.
  4. The 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!

Funeral Insurance Tips: Advantages and Disadvantages

Funeral Insurance Policies.

Funeral Insurance Policy

Insurance Plans

A funeral insurance policy often doesn’t do what it says (or rather, implies) on the advertising. Advertising for this type of senior insurance policy has changed a lot over the last few years, so it now says that it will contribute towards the cost of your funeral. In real terms, most will contribute much less than you might expect. We understand that over half a million people a year buy from funeral insurance companies, and as you might expect, some are better than others.

Advantages of Funeral Insurance Plans.

  • You can put aside a lower amount than you could for an proper prepaid funeral plan (though of course the benefits will be much lower too.)
  • No medical is required, the same as for a prepaid plan, but the insurance plan will pay out in full after an initial period, often 2 years.  So if you die in the first few years, a monthly paid life insurance can be better value than a monthly prepaid funeral plan. So if you are in very poor health and pretty sure to die in over 2 years and under (say) 6 years, this sort of plan could be a bargain.

Disadvantages of Funeral Life Insurance.

  • There is generally only accidental death cover in the “moratorium” period, typically 2 years.  If you should die from natural causes or by your own hand, some companies would pay back what you had paid in plus some interest.
  • In most cases (unless you keep increasing premiums) the buying power of the death benefit will shrink in line with funeral cost inflation.  Over the last 5 years that would have reduced the real value of a £3,000 insurance to a little over £2,000 – a big drop which will only get bigger over time.
  • Nearly all funeral insurances are “non profit whole of life” – policies which are not regulated by the Financial Conduct Authority.  They have NO CASH VALUE at any time.  This means that if you miss a few premiums because you are ill, then you die, your policy will not pay out a penny.  The longer you have paid in, the more you will lose.  Prepaid plans are the other way round.
  • Insurance premiums will typically have to be paid until you reach 85 or 90, so the longer you last, the worse value they provide. Prepaid plans are normally paid off within 10 years, so whilst the initial monthly cost may be higher, the long term value is much better.
  • With an insurance plan, you may well end up paying in more than your family get out towards your funeral.  Some companies “generously” say they will, if the policy is still running when you die, pay out all of your premiums as a death benefit.  In effect, you have made an interest free loan to them for perhaps 30 years.

Our Conclusion On Funeral Insurance.

Most people are guaranteed to lose out on these plans, and would be better off with even a very basic prepaid plan.

But there is a small group of people who could benefit.  They are people with terminal illnesses which are unlikely to result in death before 2 years are up, but are unlikely to survive for more that 6 to 8 years.   If you are unfortunate enough to be in the category, why not go for it?  Your family need to understand that early death will result in no significant benefit, but if you last through the moratorium (premiums back only) period, and don’t live for an inconveniently long time, then funeral insurance could be a bargain.

Give us a ring and we will chat the options through without obligation.

List of Recommended Over 50s Insurance

Here is our list of recommended Over 50s Insurance Companies.

Over 50s insurance always was sold to pay for funerals.  Then a few people started to point out that it was pretty useless for that purpose.   But still 500,000 buy 50 plus insurances every year for that very reason – because they don’t understand how it works. We have said it before, and so has Martin Lewis – Over 50s Insurance is an awful product.

As Martin points out, the main beneficiaries of 50+ Insurance are the insurance companies. Why?

  1. If you don’t keep up the payments (typically until you are at least 85) – they keep all your money.  That could be ten or fifteen years at (say) £20 a month down the tubes.
  2. The non-profit whole of life plans are not set up to keep up with inflation.  You will get exactly what was agree on day one if you die 20 years later. The provider may well come back to you every year or
  3. By that time you are pretty certain to have paid in far more than your family will get back. So you have lent them your money, interest-free, for 20 years or so, then they give MOST of it back, as long as you don’t miss more than one or two payments while you are quietly expiring.
  4. In order for you to “keep up with inflation,” they will keep trying to sell you top up plans of the same awful Over 50s Insurance your have already bought

Over 50s Insurance and Inflation.

With funeral cost inflation running way ahead of normal inflation, in 5 years your 50 plus insurance may be worth one third less than it was when you set it up.  In ten years, less than half the value.  At the same time, the cost of the actual funeral, at recent rates of inflation, would have more than doubled!

That is why we do not have a list of recommended Over 50s Insurance – we recommend it only as a last resort to folk who cannot afford even the most basic of prepaid funeral plans.

Over 50s Insurance Missold?

Over 50s Insurance Missold?

Funeral Plan Quotes

Funeral Plan Quotes

We totally agree that much of the advertising for Over 50s insurance is a little on the misleading side, so we’re pleased to give a bit of space to one of our competitors in the independent advice space for proper prepaid funeral plans.

“When is a funeral plan not a funeral plan? The answer is of course when it’s an over 50 life insurance plan.

“At least some life insurance companies (such as British Seniors and Liverpool Victoria) would like consumers to think they are, as they are bidding on various ‘funeral plan’ PPC (pay per click advertising) terms in the search engines Google and Bing.

“We all know that over 50 life insurance plans provide a cash sum upon death – and not a funeral. So how can it be a funeral plan if you aren’t providing funeral services? And, following on from that, to advertise on major search engines under these terms is, I strongly believe, misleading.

“Advertising, whatever the medium, is the start of the customer journey and I am surprised that the FCA hasn’t cracked down on this practice”.

Shepherd went onto to say, “It seems that insurance companies are hiding behind the fact that the FCA haven’t cottoned onto this. In the offline world it amounts to a paper advertisement promoting over 50 life insurance plans under the heading ‘funeral plans’ which these insurance companies would never do”.

“The TV Ads and literature with all of these companies all make very clear that these plans only “help with funeral costs”, it’s the start of the customer online journey they need to re-think.

“Clearly a level playing field from an industry perspective is needed and of course the consumer needs to start the journey from the correct starting point – otherwise they could end up buying a totally unsuitable product for their needs.”

Sales of the prepaid funeral plans increased by 22% in the first six months of the 2016 compared to the same period last year.

Are Over 50s Plans Missold?  Make your own mind up!