Saga Funeral Plans Over 50 Plan – Funeral Wise or Funeral Foolish?
Saga Funeral Plans offer a fairly standard Over 50’s Plan. To quote them:
“If you are aged between 50 and 85 and live in the UK, you can take out Saga’s Guaranteed Acceptance Cover regardless of any existing medical conditions. Please note inflation could reduce the buying power of the cash lump sum you leave behind. You may cancel your policy at any time, but you will not receive any money back unless you cancel within 30 days of your policy starting, in which case we will refund any premiums paid.” And “If the lump sum value is not enough to cover the full costs, the person arranging your funeral will be responsible for paying the difference.”
As an aside, there was some suspect advice about the willingness of banks to pay for funerals – the situation is quite variable and no one should assume that a bank will be willing to pay out cash for a funeral, even assuming the deceased had enough money in their account. It does happen, under very specific circumstances which will vary from bank to bank. But back to reviewing the Saga Over 50 “Funeral” Plan.,…
So we have the two classic negatives which make over 50s insurance very much a second choice to a proper prepaid funeral plan:
- NO money back if you find you can’t afford the premiums later in life. You have just thrown your money away if this happens. That means that you must be certain that you can maintain your premiums until the policy anniversary after your 90th birthday. Otherwise you lose everything – unless you have already died!
- Every year inflation will reduce the value of the plan, so even if you take out a large enough policy to cover a funeral today (say £3,000) in 20 years at an inflation rate of 3% it will only pay out £1,647 in real terms. If funeral cost inflation is 6% over that period (and it is currently 8.7%) then it will be worth just £906 – less than one third of the cost of your funeral.
The Saga Over 50 Funeral Plan does have two extra features which may be of some benefit.
- If Cooperative Funeral Care has got it’s act together by then, there may be a 10% discount off the Coops funeral services, which currently have a bit of a negative reputation. This is an option. That said, it looks as if they have switched allegiance to Golden Charter recently, and the “bonus” is £250 which at current rates covers about one years funeral cost inflation!
- The Saga Over 50 Funeral Plan pays out in full after 12 months if you should die early. Most other Over 50 Plans don’t pay out in full for 2 years, though it does vary and there is one at present which pays out in full after just 6 months (which seems rather risky for them!)
The Saga Over 50 Plan is actually a Prudential Insurance policy. Whilst there is no substitute (in our opinion) for a proper funeral plan, if you are in good health and have an IFA, you should be able to get a much better deal.