Funeral Bonds in the UK.
Prepaid Funeral bonds in most cases in the UK are just another name for prepaid funeral plans. We specialise in advising on! It is just a way of putting aside money for the specific purpose of relieving your family or friends of the burden of suddenly finding lots of money to pay for your funeral. But that said, the funeral bond comes in many disguises, and they are NOT all doing the same job. The Co-operative often refer to their funeral plans as funeral bonds.
ISA Funeral Bonds.
This is a savings account wrapped up to appear to be to pay for your funeral. It may well do so, but you need to be sure that it is not just a standard investment fund or a high-interest deposit account. Neither of those is likely to have any guarantees built in, and normal inflation or modest (or negative) investment returns may put paid to any chance of covering funeral costs. Worse still, in most cases, it may be necessary to obtain a Grant of Probate after your death in order to get at the money. The funeral director will not wish to wait 3 to 12 months for his money!
Insurance Funeral Bonds.
These are similar to the ISA Funeral Bond, but with the savings being in the form of an insurance policy. The idea is that a low monthly contribution will build up enough money to pay for your funeral. Once again, the only guarantee is the death benefit. In most cases, that will be the same in 40 years time as it is now (which won’t pay for a pet funeral never mind yours!)
The other issue is that many of the insurance funeral bonds never have a cash value. This means that the full benefit can be lost if all premiums are not paid. If you are old and ill, and fail to notice that the bank has messed up the payment, everything that you have put in could be lost. Just to rub salt in the wounds, most of them need to be paid every month until your are at least 85 and you could pay in more than you get back,
Funeral Bonds Summary.
They are confusing, so please do contact us for free no obligation advice. Use the enquiry form to the right, or call us on 0800 0588 240, and we will be happy to help.
Prepaid Funeral Bonds.