Are there any disadvantages to a funeral plan?

We are told that planning early for most situations is the ideal thing to do. Often we plan for having a family. As well as planning for our retirement. So it makes sense that we should plan for our funeral.

A funeral plan allows us to do this at any point over the age of eighteen and comes with many advantages, but are there any disadvantages to taking out a funeral plan and setting things in place early? 

Choosing a funeral plan can be a big decision. It is a financial commitment, but one that can have many benefits in the long term. Even though they do have their disadvantages. They can go a long way to bringing both yourself and your loved ones peace of mind. 

What is a funeral plan? 

A funeral plan is a way for us to plan and pay for our funeral ahead of time whilst we are still fit and well.

You can arrange this directly with a funeral home or through a funeral plan provider. Once it is paid for. It stays that way until the time of your death. When all your family needs to do is to let the funeral directors know of your passing.

With the average funeral costing £5,000. Planning ahead of time not only takes some of this financial strain away from your loved ones, but it also allows you to state your own wishes. Such as whether you would like to be buried or cremated. 

Most funeral plans will cover the following

  • The funeral directors costs.
  • Transport to the funeral home. 
  • Care of the body.
  • Visitation in the chapel of rest. 
  • A coffin.
  • A hearse. 
  • Some plans will cover some of the cost towards the cremation or burial but this will vary between each provider. 

How much does a funeral plan cost? 

The price of a funeral plan will vary between each provider. The cost will also depend on which level of cover you decide to choose.

The average price is between £3,000 and £5,000. This can either be paid in one lump sum, or via a monthly payment plan. 

Are there any disadvantages to having a funeral plan? 

With everything in life there are both advantages and disadvantages. This is no different for funeral plans.

The two biggest advantages are, the financial strain being taken away from your loved ones and you being able to set out your wishes ahead of time. However, there are some disadvantages that you should be aware of before you commit to your funeral plan

You may not save money

One of the biggest draws to a funeral plan is the price you pay at the time, is the price it stays at.

The costs of funerals are always increasing. So if you were to take out a funeral plan today, but you live another twenty years your family will not be asked to pay the difference in the price. However, if you pass away soon after taking out your plan. You will not benefit from this protection against the rising costs. 

Will not cover everything

Typically a funeral plan does not cover everything. So there will be costs that your loved ones will still need to pay.

A funeral plan does not normally cover the cost of the burial plot or headstone for example. It is important that you fully understand before choosing your cover, exactly what your plan includes.

Your provider should provide you with a cost breakdown. 

Non refundable

Your funeral plan is non refundable. Should you choose to change your mind at a later date you would not receive a refund.

If you decide to cancel after the cooling off period you may be charged a cancellation fee. 

Not regulated by the FCA

Funeral plan providers are not regulated by the Financial Conduct Authority.

However, there is the Funeral Planning Authority (FPA) which is the professional body for providers. This body has a strict code of conduct which they expect all of their members to adhere to.

When choosing your provider ensure that you check that they are members of the FPA.

Funeral plans for the UK only

Your funeral plan will only be valid within the UK.

If you choose to retire abroad, you will not be able to take your funeral plan with you. Should you choose to move within the UK, many providers will allow you to move your plan to a funeral directors in your new area. This arrangement will vary between providers so it is always advised to check beforehand. 

Choosing a funeral plan can be a big decision. It is a financial commitment, but one that can have many benefits in the long term. Even though they do have their disadvantages. They can go a long way to bringing both yourself and your loved ones peace of mind. 

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