Is Pre-Paying For A Funeral A Good Idea?

We are always being told to look for the positives. To look on the bright side and to live everyday to the fullest. Planning our funeral in advance can seem like a morbid idea.

No one likes to think about their own death or the death of a loved one. It is a subject that we prefer to brush under the carpet until we are faced with it.

In a world where there are already bad things happening everyday. Why would we want to think about death? 

Rather than being a disheartening idea a funeral plan allows us to pre plan and pay for our funeral in advance.

By obtaining a plan directly from a funeral home or via a funeral planning provider it can enable us to set out our wishes. Allowing us to carry on our lives knowing that when the unfortunate time does come, everything is already set in place. 

Are funeral plans a good idea? 

What is the right decision for one person. May not be the same for someone else. It is up to you as the individual to weigh up the pros and cons and decide whether a funeral plan is the correct route for you.

What are the advantages? 

Acceptance isn’t based on health or age

Anyone over the age of eighteen is able to take out a funeral plan. As with some other products. Like life insurance. Your acceptance is not based on your medical history, your current health or your age.

The price of your plan is simply based on which level of funeral cover you choose. These prices will vary between different providers. 

No financial strain

The average price for a funeral is around £5,000. If you passed away would your family be able to afford this out of their own pocket?

There may be circumstances where your estate may be able to cover the cost of your funeral, but if this isn’t the case. By having a funeral plan, you automatically ease the financial strain that a funeral can place on your family members. 

State your wishes

We have all heard stories where a family has had arguments over funeral plans. With one person wanting one thing and another person declaring that the deceased wanted another.

With a funeral plan you can clearly state your own wishes and these will be carried out. Without argument.

It may be that you have clear wishes of being cremated or buried. Whatever your wishes may be. By planning ahead you can be assured that they will be kept. 

Fixed price

The costs of funerals are always increasing. If you were to take out a funeral plan today, but did not pass away for another twenty years. The chances are very high that the cost of your funeral will be more expensive.

When you have a funeral plan. The price that you pay for your plan is fixed and your family members will not be asked to pay the difference. 

No Inheritance Tax

Sometimes the question is posed as to whether it may be easier to save money for your funeral in a savings account. This is an option, but the money may be subject to inheritance tax. However, a funeral plan is not counted towards inheritance tax. 

Flexible payment

You can choose to pay off your funeral plan in one lump sum. Alternatively, you can spread the cost with monthly instalments until your plan is paid in full.

NOTE: If you choose to pay monthly, then this will be subject to interest charges. 

What are the disadvantages? 

UK only

Your funeral plan will only cover you for within the UK.

If you choose to retire abroad you will not be able to take your plan with you. However, if you do move within the UK, many providers will allow you to move your plan to a funeral director in your new area.

This will vary between providers though. So it is always advised to check their terms and conditions before agreeing to your funeral plan

Cancellation fee

If you change your mind at a later date your funeral plan is non refundable.

Choosing to cancel after the initial cooling off period means that you will more than likely be charged a cancellation fee. 

Not everything is covered

Although your funeral plan will cover a large portion of your funeral. It will not cover everything. Meaning that there will be things that your family will be asked to pay for.

Many plans do cover

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

Often the cost of the burial plot and headstone is not covered. These costs can be paid by your estate or if that is not possible then your loved ones will be required to cover the expense.

At the time of taking out your funeral plan. Your provider should provide you with a full cost breakdown. This means that you can easily see everything that is covered. 

May not save your money

One of the biggest advantages of a funeral plan is that the price is fixed as the cost of funerals increase.

This only works if there is enough time between taking out your plan and when your funeral is needed.

If you take out a funeral plan and then pass away a short while after, your loved ones will not benefit from the fixed price advantage. 

Not regulated by the FCA

Currently funeral plans are not regulated by the Financial Conduct Authority. However, there is a professional body for providers called the Funeral Planning Authority (FPA). Whom requires all of its members to adhere to a strict code of conduct.

When it comes to making a choice concerning your funeral plan provider. It is advised to check that they are registered with the FPA. 

As with everything there are always advantages and disadvantages. Funeral plans are no exception.

What is the right decision for one person. May not be the same for someone else. It is up to you as the individual to weigh up the pros and cons and decide whether a funeral plan is the correct route for you.

It is also important to obtain quotes from different providers. Comparing what each one is offering, to find the best funeral plan for you. 

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