Funeral Plans – Pros and Cons

With the cost of funerals increasing year on year it’s perhaps little wonder that more and more consumers are now looking at the pro’s and con’s of the many prepaid funeral plans on offer. 

At the time of writing (2018), the average cost of a funeral can typically fall anywhere between £4,000 and £6,000 so there’s certainly good justification for taking funeral insurance into account when it comes to forward financial planning and added peace of mind.

What exactly is a funeral plan?

A funeral plan is basically a means of paying for a funeral in advance.  Whilst there are numerous options available on the current market, they can certainly be tailored to suit most individual requirements (not to mention, of course, differing budgets) – ranging from the very basic right through to the much more elaborate.

So, what are the pro’s and con’s of prepaid funeral plans?

As with any other type of financial product, there are pro’s and con’s to any type of prepaid funeral plan and in this article we take a look at both aspects in much more detail.

The “pro’s” of a pre-paid funeral plan.

Firstly, let’s take a look at the more positive side of pre-paid funeral plans:

  1. Given that they can be paid for by way of either one lump sum payment or regular monthly instalments, a pre-paid funeral plan means they can be made affordable to most and, even then, on a budget to suit.

If paying by way of a lump sum payment, then this usually means that the cost of the funeral itself will be ‘frozen’ and that ultimately, your loved ones won’t have to find any additional money when it comes to arranging the funeral.  For most, this has the added benefit of also offering peace of mind for all concerned – not to mention an opportunity for your loved ones to grieve without the added stress of having to find money at what might be very short notice.

If, on the other hand, you choose to pay for your funeral by way of monthly instalments, then you might find that the funeral plan is made much more affordable and can easily be incorporated into your regular monthly budget i.e. alongside other bills and financial commitments, such as rent or mortgage repayments, utility bills and so on.

  • When it comes to choosing a prepaid funeral plan, you’ll typically be given several options to choose from, depending on both your specific requirements and your overall budget.  This means that you can decide what the most important elements are for you, thus enabling you to choose a bespoke package based around your own personal wishes.
  • Should your personal circumstances change over a period of time (as, for many, they often do) then you’ll still be able to change your funeral plan to reflect these changes, and usually without any associated cost (although you should always check your policy for any administrative charges which might apply should you need to do this).
  • By purchasing funeral insurance, you’re ensuring adequate protection for both yourself and your loved ones.  This means that, when the time comes, they won’t have to worry about the cost of your funeral – or having to think about any specific wishes you might have had, since these can all be incorporated quite easily into your plan.
  • If you choose to take out a funeral plan on a budget (for example, simply to pay for the burial or cremation costs) then this still leaves a great degree of flexibility for your loved ones to add their own personal touches in the event that you haven’t specifically expressed otherwise. 
  • Unlike some other financial products (such as life or health insurance), you can take out funeral insurance without the need to attend a medical and you should be accepted, whatever your age.
  • Finally, of course, by opting into funeral insurance, you can be very specific about your how your funeral should be managed.  So, whether you want a very quiet affair – or something much more elaborate – every last detail can be incorporated and taken of; just the way you would have wanted.

The “con’s” of a pre-paid funeral plan.

  1. Perhaps one of the main disadvantages of funeral insurance is that it’ll ultimately involve you entering into a legally binding contract – and these are certainly capable of going wrong from time to time.  For this reason alone, it’s imperative to ensure you choose the right insurance provider and to ask as many questions as you need to before you decide to sign away on the dotted line.
  2. Some policies may require a certain number of years to pass before it covers all associated expenses; thus meaning that your loved ones may find themselves having to make up any shortfall.  What’s more, should you opt into a monthly repayment plan then it’s imperative to ensure that all payments are kept up-to-date since any default can mean that the plan is cancelled in its entirety and you won’t get a single penny back.
  3. Should you choose to take out funeral insurance with your local funeral director then you also need to consider whether this means you’ll have to use that particular director for all the arrangements; or whether you have the flexibility to choose someone else going forward.  This could be a particular bone of contention should you choose to move elsewhere within the UK (perhaps as part of your retirement plan) and could certainly cause issues further down the line – particularly if you’re no longer local to the funeral director you first consulted.
  4. Finally, if you decide to take out funeral insurance then always ensure that you’re not simply using the money for things which should be taking priority in the ‘here and now’ – for example, rainy day money, or money for emergencies etc.  Remember, the cost of your funeral can still be taken from your estate once you pass away so it’s important not to use any spare cash or savings on something you could be enjoying ‘today’.

Ultimately, of course, funeral insurance is there to be of benefit to all concerned so it’s crucial to shop around, get the very best advice and only commit to it once you’re sure it’s absolutely right for YOU and your loved ones.