How does a funeral plan work?

With the price of funerals always increasing. Funeral plans have become a popular way for individuals to make all of their arrangements whilst they are still alive.

Funeral plans can go a long way to bringing both you and your loved ones peace of mind. Knowing that a lot of the financial commitments and planning have been taken care of. Leaving you free to enjoy life. 

What is a funeral plan though and do you need one? 

What is a funeral plan

A funeral plan is a way for you to plan and pay for your funeral ahead of time. By either purchasing directly from a funeral home or via a funeral plan provider.

There are no time limits of when this has to be used by, they can be purchased by anyone over the age of eighteen years old and there are several benefits to having one in place 

Could your family afford to pay for your funeral?

The average price of a funeral is around £5000.

If you suddenly passed away would your loved ones be able to afford this?

By paying for your funeral in advance, you take this financial weight off their shoulders. 

Do you have wishes you would like carried out?

It could be that you have strong wishes surrounding your funeral. Especially regarding whether you want to be buried or cremated.

Having a funeral plan in place allows you to plan and stipulate exactly what you want to happen. 

Lock in the price

As mentioned above. Funeral costs are always increasing. The price you pay today for your funeral plan is the price it stays.

If your funeral doesn’t take place for another ten years. Your family will not be asked to pay the difference in price. 

How much does a funeral plan cost? 

Prices will vary between different providers and are also dependent on which level of cover you choose.

Providers will all have different levels of plans and some even allow you to have bespoke options at an extra cost.

Most plans cost between £3,000 to £5,000. 

Is everything for my funeral covered under my plan? 

Most funeral plans will not cover everything. For example, most will not include the burial plot and headstone. They will only pay part of the cost towards the burial and cremation. 

Many plans cover as standard

  • Transportation to the funeral home. 
  • Care of the body. 
  • The costs of the funeral home. 
  • Visitation in the chapel of rest. 
  • The funeral service. 
  • The coffin.
  • A Hearse. 
  • Some plans will also cover a limousine for the family. 

The parts of the funeral that are not covered under the plan will need to be paid for either from your estate or by your family members. 

What happens to the money?

When you pay for your funeral plan your money is either placed into a trust or invested in an insurance policy that will pay out once you die.

Although funeral plans are not regulated by the Financial Conduct Authority, there is a professional body called the Funeral Planning Authority (FPA). Whom have a strict code of conduct for its members.

It is important to choose a provider that is a member of the FPA. 

If the provider that you choose has the unfortunate circumstances of losing their business. Then the FPA and it’s members pledge that they will look at paying for any funeral plan that this provider has. 

How do I buy a funeral plan?

If you decide that you would like to take advantage of a funeral plan then you should carry out the following steps.

Compare quotes

You are able to compare several quotes online.

This will help you to get a feel for the price you will be looking to pay. Do be aware though that not all providers will cover for the same things.

It is important to also speak to potential providers directly before making your decision. 

Ask for a cost breakdown

Your potential provider should provide you with a cost breakdown.

This will let you see exactly what you are paying for and what is and isn’t covered within your plan. 

Decide how you will pay

You will either be able to pay for your plan on one lump sum or with a monthly payment plan.

It will work out cheaper to pay in one payment. This is because payment plans are subject to interest charges which can quickly add up over time.

If you do decide to use a payment plan try to choose the shortest amount of time as possible. 

Ensure you understand everything before signing

If you have any concerns or you are unsure of the cost breakdown. Ensure that you clarify this before signing your funeral plan.

Should you wish to cancel at a later date. Not only will you lose money, but you may also be charged a cancellation fee. Which can run into hundreds of pounds. 

Funeral plans can go a long way to bringing both you and your loved ones peace of mind. Knowing that a lot of the financial commitments and planning have been taken care of. Leaving you free to enjoy life. 

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