Prepaid Funeral Plans Explained
On this page, we will explain exactly what a prepaid funeral plan is and the different features and benefits of having one.
"Our aim is to offer jargon free information to the UK consumers about which funeral plan is best suited to their needs. As one of the UK's leading funeral plan comparison companies, we have to make sure we put ourselves in a position of independence and unbiased opinion. To do this we have to work for the UK consumer first and plan providers and funeral directors second! This will then open the doors to better practices and transparency from all within the industry and make sure the consumers are happy with and fully understand the true benefits of a funeral plan above other available products that the UK are more accustomed to."
Why A Funeral Plan
A funeral plan (Prepaid Funeral Plan) is a way of paying for your funeral in advance at today's prices, saving your loved one time, stress, confusion, arguments and money at possibly the most difficult of times.
The easiest way to look at a funeral plan is to understand it is not an insurance policy and holds no cash value. You are simply paying for a funeral, something which is usually and traditionally common place following a death in over 95% of circumstances.
Funerals are quite simply a mixture of service's and products bundled together usually by your local funeral director.
This may be a large chain funeral director or your local independent family run funeral directors.
These services and products are most commonly made up of the following:
Funeral directors services, which include:
Undertaking services (collecting from place of death, care in Mortuary, service preparation)
Family liaison (collaborative planning on times and dates etc)
Chapel of rest
Hearse transport (many options available)
Limousine transport for funeral procession (if required)
Coffin and shrouds
Third party charges:
Doctors cost's for death certification (Commonly around £88 per doctor, usually two required to certify death)
The crematoriums cost (Often Council owned)
The Minister or celebrants cost (This varies in price depending on religion and location)
Grave Diggers (If required for burial)
Usually, your funeral director will arrange and liaise with the third parties to put the price together when generating a price for the funeral. Of course, there are extras that can be added on to any funeral plan such as announcements and order of service documents but these are at the discretion of the funeral organiser (next of kin) at the time and not commonly included in a funeral plan.
When you combine all these products and services you are then provided with a price. Currently, the average cost of a standard funeral in the UK is £3800 but it is not uncommon for funeral directors to charge upwards of £5000 depending on area and affluence of family.
In circumstances where there is no funeral plan in place the family or executor of the estate is left to make all decisions regarding type of funeral, whats included, which funeral director to use, the wishes they think the deceased wanted (only 18% of loved ones know their families wishes) and of course left to pay for it. Commonly most funeral directors in the UK will now ask for a minimum deposit of £1500 - £2500 before collecting the deceased. Life insurance, savings or the estate finances can not be accessed quickly to cover these costs. This is the reason why the highest spend on credit cards in the UK's is with funeral directors. it's over 30% of all UK credit card debt!
So this is where the funeral plan starts to become clear.
You simply outline exactly what you want your funeral to be! At the end of the day, it's your funeral and people should know your wishes. 84% of people have strong beliefs what a funeral plans they want but never write it down or properly inform their loved ones!
So You choose what you want in your funeral, This will then give you a price of how much it will cost a today,s price. Let's say it comes out as a plan provider has said they will give you everything you want and it's £3900 if you were to die today.
Great that's today's price but I don't intend to die for a long time!! (a popular answer)
Well with a funeral protection plan you are guaranteed the funeral at today's price for life!!!! That's a fully inflation proof solution and is not tax deductible.
So if you were let's say 60 and you lived until the average life expectancy of 85 that's 25 years worth of inflation. The cost of a funeral at this time will be easily £8000 and that's being conservative.
So Simply put you are getting a £8000 funeral for £3900 that's a £4100 saving instantly for you or your estate and a £8000 saving for your next of kin or executor!
Not only have you saved your loved ones a lot of money, you have also taken away any stress, worry or arguments about what you wanted and then trying to organise it, as all that is required is one very simple phone call to the funeral director who is in charge of your funeral plan and everything is immediately activated with no wait time or investigation to see if the terms of the policy had been breached etc.
You are guaranteed the funeral you want, at today's prices with no complications. These are the reasons why a funeral protection plan is far superior to other products available in the UK! FACT!
Do I need a funeral plan?
Yes! Data shown on the SunLife Cost of Dying Report 2015 shows the average cost of a funeral has risen by 92% over the last 11 years, and while the average cost of a funeral in 2004 was £1,920, by 2015 it was £3,693*. At this rate, the average cost of a funeral in 2020 could be more than £4,620.
By providing funeral plans tailored to your individual needs we can help alleviate pressure and minimise stress to your loved ones so you can be confident that the cost of your funeral will be covered, and your plans carried out as requested by arranging it today.
At My Funeral Plan Supermarket, all of our funeral plans are available to anyone of any age no matter what your medical history or health status, offering a range of funeral plans that can be tailored to your individual tastes and budget.
All your family need to do is contact the director your registered with and everything will be taken care of when the time arises.
We search the funeral market for you and can offer plan prices start from just £1,695 with some of the most-affordable and cost-effective providers of funeral plans in the UK.
We offer the largest choice of flexible payment options such as to pay a lump sum, pay interest-free over one or two years, or alternatively spread the cost over a fixed term of up to ten years. Whichever option you choose, ensure the price of the funeral director’s fees and services are fixed for life.
For grieving loved ones, organising a funeral is often very difficult and upsetting. Obligating to put themselves in the deceased shoes, making decisions on what they think their loved ones would have wanted, which isn't always the right decisions. A prepaid funeral plan could avoid difficult decisions at this very stressful time, and in addition preventing any financial worries over how they will pay for the funeral costs.
Avoid rising funeral costs.
Putting a funeral plan in place today will protect your family from inflated costs of the future. Funeral costs have risen by 92% over the last 11 years, and while the average cost of a funeral in 2004 was £1,920, by 2015 it was £3,693**. At this rate, the average cost of a funeral in 2020 could be more than £4,620.
By acting today you will save money with
Prepaid funeral plans, no matter how much the price of your funeral director’s services increases in the future, You guarantee your loved ones will have nothing extra to pay for those services that are included in your plan. So the sooner you take out a prepaid funeral plan, the greater the saving could be.
Taking out a plan for a loved one?
These days a lot of loved ones like to take matters into their own hands and prepare for others in advance, taking away burden. Anyone can take out a plan as long as they are either-
*Acting power of attorney
*Are able to make their own decisions.
We deal with sensitive matters daily and we guarantee absolute confidentiality at all times.
How secure is my money?
All prepaid funeral companies are set up with a Trust fund where your money is held securely for when it's needed at the time of your death! These trust funds are set up with Trustees that are independent of the prepaid funeral company and their directors. This relationship is also managed by trust actuaries and also solicitors that specialise in managing the relationship between the prepaid funeral company and the fund itself.
The Trust itself will usually be set up with a large amount of capital and have sections ring-fenced for your protection meaning, even if you do not die for 40 years there will always be enough funds to cover the costs of the funeral you had agreed at the time you took out the plan. The trusts are regulated by the Prudential Regulation Authority and the Financial Conduct Authority (FCA) to keep your funds safe and secure for when they are needed.
If you would like further information or questions about prepaid funeral plans, please don't hesitate to contact us or to learn more about the regulators and the history of prepaid funerals plans please go to funeral plan industry explained here
Are there any alternatives to a prepaid funeral plan?
A prepaid funeral plan is one way of ensuring your family doesn’t have to pay out thousands of pounds after you’re gone. But do you need to buy a plan? Are there any alternatives? And what is the difference between the alternatives and prepaid funerals?
A funeral plan is not the only way to meet the costs of a funeral there are alternatives, money from your estate, traditional savings accounts and life insurance policies could all be possible solutions however these do not 100% guarantee the funeral costs.
Over 50's life insurance plan
Over 50's insurance plan pays out a fixed lump sum when you die to your family, but there are some drawbacks to this type of cover. The payout does not increase with inflation, meaning that you may end up paying more in premiums than you can claim back. As an example, you buy a £10-a-month policy with Aviva at age 50, this would pay out £3,347 but, by the age of 77, you would have already have paid this much in premiums.
This product is offered without medical screening, making it potentially useful for those who can’t afford standard life insurance because of existing medical conditions.
Saving accounts have the advantage of growing your money with interest. However, the rising cost of funerals would mean that you may not earn enough interest to keep up with this increase. According to Royal London the life and pensions specialist, the average cost of a funeral increased by 4% in 2015 and stands at around £3,700. Which with the current rate of inflation, will not secure your funeral at today's costs.
Paying from your estate
Funeral costs can also be paid from your estate after you die. Banks will normally release funds if they’re presented with an itemised bill from a funeral director and a copy of the death certificate although there could be a delay if the estate goes into probate.
When looking into a plan for yourself or on the behalf of a loved one we have a few tips to help you find the right plan suited for your needs.
1. Consider how your family or loved ones will cope financially when you die
Funeral plans are designed to help meet the cost of the funeral when you’re gone, so think carefully about your family’s finances. If your estate could cover the cost of a funeral, or your family has the money even with the increases in funeral costs, a basic plan might be the best option to ensure the basic costs are covered.
2. Find a number of policies quickly by using our comparison site
Or, My funeral plan supermarket comparison site is a good way of taking the legwork out of finding a number of suitable plans. Remember, funeral plans are complex so you should examine the policy carefully. Call one of our senior advisors today for a personalised plan and to receive exclusive discounts.
3. Check out our cost breakdown for funeral-plan providers
Funeral plans can differ dramatically, so check out the costs of funeral plans for a breakdown of what is covered by the major providers or contact us directly for your personalised quote.
4. Paying for your policy as quickly as you financial can
Like many financial products, such as home insurance and car insurance, funeral plan providers give you the option of paying either in instalments or in a lump sum. Most providers give you the option to pay over 12 months to 120 months. Paying in instalments for a long time will cost more because of administration fees and interest. While 12 monthly payments may cost roughly the same, paying over 60 months, for example, can add around 15%-26% to the overall cost.
5. Read your documents carefully
Funeral plans cover most of the cost of funerals, there are many items that are excluded, such as headstones and burial plots. Some costs are also capped, such as burial and cremation costs. Contact us today and one of our senior advisors can explain the plans fully.
Click here to view our Blog with more funeral industry information, current discussions and helpful tips.
We have also answered the most common questions we encounter on our Frequently Asked Questions page.