Funeral Plan Security: is your money safe?
Financial funeral plan security is something we take very seriously. It will always be considered when you return are ready to go ahead and organise your funeral plan. That is the time to complete and return and you our funeral plan enquiry form. If you are keen to get on with it, give us a ring on 01323 740844.
Funeral plan security is vital – you don’t want to hand over your money to a firm which is not financially secure. There are three aspects to this:
1) Funeral Plan Security – how we handle your money.
That’s easy: we NEVER handle your money – your cheque or card payment will always be made out to the funeral plan provider, it will never go into our bank. There is no need for the payment even to go through our office, it can go direct to the funeral company.
2) Over 50’s Funeral Plans.
Many insurance based plans offer great security – there is just often a mismatch between the expectations raised by the sales message. People buy these plans to pay for a funeral. But that is NOT what they are designed to do!!! Most insurance based plans are designed merely to pay out a lump sum to help towards funeral costs. Once again, most of them offer a specific death benefit, which declines in value every year in real terms. At the current rate of funeral inflation, an insurance plan with a level death benefit won’t even pay half of the cost of a funeral in 11 years time. And most of them are not set at a high enough benefit to pay for a funeral in the first place.
We really don’t like these plans, you can pay in more than you get out, and you will usually lose the lot if you stop paying. Don’t cancel them though – that plays even more into the insurance companies profits. The best idea is to take out a proper funeral plan as well and let the Over 50s just pay some of the other bills.
3) Funeral Plan Security: prepaid Funeral Plans.
In the UK we are fortunate that funeral plan funds are regulated so there is a high degree of security for you money. The Financial Services Act does a fair job in this respect, but we feel that some additional funeral plan security is provided by membership of the Funeral Planning Authority. We therefore generally need strong reasons to use firms which is not a member of the Funeral Planning Authority. It isn’t a ban, just us being cautious on your behalf.
The regulation of such plans is in 59 & 60 of The Financial Services & Markets Act 2000 (Regulated Activities) Order 2001. The intention is to ensure that money paid to a funeral plan provider is kept safely, and is available for the funeral.
The Funeral Planning Authority is a self-regulatory body set up by the Funeral Planning Council Limited and the National Association for Pre-Paid Funeral Plans to ensure that:
- funeral plan providers that are regulated by the Authority (“Plan Providers”) maintain high standards of professional conduct; and
- the money that customers pay to a Plan Provider for a funeral plan is safeguarded so that, when the time comes, their funeral will be provided in accordance with that plan.
The Authority does this by:
- checking that Plan Providers and funeral plan trustees are fit and proper persons and ensuring that they comply with the Authority’s Rules and Code of Practice;
- setting standards of professional conduct for Plan Providers, their staff, agents and representatives;
- ensuring that funds are protected by being held in trust, are regularly audited, regularly reviewed by an actuary and are only invested by independent fund managers authorised under the Financial Services and Markets Act 2000;
- providing arrangements for resolving disputes between Plan Providers and their customers; by a Pledge to Customers so that, in the unlikely event of a Plan Provider becoming insolvent, the other Plan Providers shall co-operate and examine ways in which the Authority might assist in arranging delivery of the funeral of the customers of the insolvent Plan Provider.