Can you cash in a funeral plan?

With the rising costs of funerals. Many people are looking towards funeral plans to help them not only pay for their funeral in advance, but to also clearly state their wishes ahead of time.

In recent years, these plans have become more popular. They can be an excellent way of taking the financial strain off your family members at an emotional time.

Although a funeral plan is a financial commitment. It is one that can bring peace of mind that at the end of your life everything will be taken care of for you and your loved ones.

What happens if you have a funeral plan in place, but come into financial troubles?

Can you cash in your funeral plan

Technically you cannot cash in your funeral plan. When you pay for your plan, either in one lump sum payment or with monthly instalments. You are simply paying for the cost of your funeral upfront. 

Anyone over the age of eighteen can purchase a funeral plan either directly from a funeral home or via a funeral planning provider. The money you pay is either placed into a trust or invested in an insurance policy that pays out once you pass away. 

How much does a funeral plan cost? 

The prices of funeral plans vary between different providers and is also dependent on what level of cover you choose.

There are a wide range of choices for funerals. Some providers will allow you several options such as a basic plan or a more bespoke option.

Prices typically range from between £3,000 to £5,000

A funeral plan will not cover everything. However, a standard funeral plan will normally cover the following. 

  • The funeral directors cost.
  • Transportation to the funeral home. 
  • Care of the body.
  • Visitation in the chapel of rest. 
  • Costs of the funeral service. 
  • The coffin.
  • A hearse
  • Some plans will cover part of the cost towards the burial or cremation. 

Most plans do not cover the cost of the burial plot or gravestone. This would need to be paid either by your estate or your loved ones. 

What if I need to cancel my plan? 

Funeral plans are designed to remain in place for the remainder of your life.

There may come a time when you need to cancel your plan. If you paid with one lump sum then you may be entitled to your payment back. Although there will more than likely be a cancellation fee which could run into hundreds of pounds.

You would also be charged an administration fee. Both of these charges would be deducted from the money that you are claiming back. 

If you are paying for your funeral plan by instalments and decide to cancel. Then once again you may be able to obtain back the money you have already paid. Minus any administration and cancellation fees. 

How much money you could get back, the admin fees and the cancellation fees will all vary between individual providers. Therefore, it is important that you check their terms and conditions before taking out your funeral plan.

I need to stop my monthly instalments?   

There could come a time when you are paying for your funeral plan in monthly instalments, but come into financial troubles. Meaning you are unable to continue with these payments.

Some providers will allow you to stop your payments and keep the money paid so far to be used at a later date towards your funeral. Again this will vary between all providers. So it is advised to check their policies at the time of taking out your plan with them.

If your provider does not offer this option. Then you would need to cancel your plan and you may be entitled to the money paid so far to be returned to you. Minus the associated fees. 

As stated above. Each provider will have their own terms and conditions. With all having slightly different cancellation policies. It is always advised that you fully understand these before committing to your funeral plan. If you are unsure of anything in those terms, then it is your responsibility to ensure that you clarify these with them. 

Although a funeral plan is a financial commitment. It is one that can bring peace of mind that at the end of your life everything will be taken care of for you and your loved ones. 

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