Funeral Plans Pros and Cons

Funeral Plans Pros (Advantages)

Save your family money by paying today’s prices

In the event of someone’s death, the cost of arranging and conducting a funeral can fall to their family. The costs of funerals are rising dramatically every year, so it makes sense to fix the price of your funeral by paying for the plan upfront – at today’s prices.

A typical, basic Funeral Plan will cover the costs of the following services:

• All funeral director costs and support to plan funeral
• Transport of the deceased to the Funeral Director
• A minister to conduct the funeral ceremony
• A coffin
• A hearse
• Care of the body before the funeral
• Cremation fees

What’s more, you’ll lock in those costs at today’s prices. 

Peace of mind

When you lose someone, the last thing you want to think about is arranging a funeral and paying for it in full with little to no notice. By arranging a Prepaid Funeral Plan upfront, you take the worry away. You will give yourself the complete peace of mind that your family will not have the stress of organising or paying for an expensive funeral in the future.

Plan your funeral in advance

If you want your loved ones to remember you in a certain way, a Funeral Plan may be the right choice for you. You can personalise your funeral in advance. You can pick the music, flowers, invitations, hymns or any other customisation you can imagine!

Your family will have much less to think and worry about when the time comes.

Reduce inheritance tax

If you prepay for your funeral, the money you use towards the plan will be free of inheritance tax.

Split your payments over affordable monthly payments

Rather than leaving your loved ones with a significant financial burden at short notice, you can prepare in advance. One of the most popular pros is having the ability to split your funeral costs into affordable monthly payments that work with your budget, and that give you a funeral in the future at today’s prices.

Most plans have a range of funeral payment options for the plan holder to choose from including:

• One single payment in full
• Interest-free instalments of up to 12 months
• More extended payment plan options, with specific interest rates

Your Funeral Plan funds are typically kept safe in an Independent Trust Fund which makes a lump sum payment to the Funeral Director when the time comes.

Work with a recommended Funeral Director

Your selected Funeral Plan provider will often recommend a Funeral Director for you to work with from within their network. This arrangement is one of the significant pros as the provider will vet their Funeral Directors and ensure you are working with someone you can trust to deliver a quality service and to take the worry out of your funeral planning. When the time comes, they can be trusted to provide a funeral that is in line with your wishes.

Some plans payout even if you die before completing instalments

Some Funeral Plans provide full protection even if you die before completing the agreed payment plan; look carefully at the Terms and Conditions to understand what cover you have in this situation.

With other providers, if you buy a plan with instalments and you die before completing the payments then your family or your Estate would need to pay the balance.

Alternatively, if you have the funds, then you can pay for your Prepaid Funeral Plan in full and take this worry away.

Protect your family from cashflow issues

One of the key pros with a Funeral Plan is that there is little to no financial burden on your family. Even if you hold the cash for the funeral in a savings account, it could be some time before your family can access this money; for example, they may need to go through probate first. Therefore, they would need to fund your funeral by temporarily contributing a lump sum.

Also, if you had the money sat in a savings account, then you would not benefit from fixing the cost of your funeral at today’s prices by taking out a Funeral Plan.

Protection from higher costs in parts of the UK

If you live in an expensive part of the UK or are considering moving to one, then look for a plan provider whose Funeral Plan costs are not dependent upon where you live in the country. This arrangement is sometimes the case with Prepaid Funeral Plans from larger, national companies.

If you are considering moving in the future, carefully check the Terms and Conditions of your Funeral Plan to make sure that there will be no extra costs associated with moving to another Funeral Director.

By carefully selecting your plan provider to fit your personal circumstances, you can benefit from the pros of Prepaid Funeral Plans, without some of the cons.

Reduce the need for decision-making during a time of stress for your loved ones

When the time comes, your loved ones will likely be emotional, which is not the best situation in which to make decisions relating to funeral planning.

By planning your funeral, you will make this difficult time less stressful for them. One of the most valuable pros for them will be having a Funeral Director who already knows your wishes, leading all the arrangements for them. What’s more, there will be less need for them to contribute money to the funeral planning as you will have taken care of the costs in advance.

Prepaid Funeral Plans encourage conversations

Planning your funeral in advance has both pros and cons; it can be challenging to think about our mortality; however, it also reduces stress for others when the times comes.

Prepaid Funeral Plans encourage you to document your wishes and to share these with the individuals who are likely to organise your funeral. These clear plans take the guesswork out of the arrangements when the time comes.

There are lots of Funeral Plans and providers available to choose from

Many companies are offering Funeral Plans, so it’s possible to find a plan that suits your needs well, at an affordable price. However, the sheer amount of option has both pros and cons, as it can be challenging to know which plan is best for you and which companies to trust. That is why it is essential to do your research.

Funeral Plans Cons (Disadvantages)

If you plan to move country

If you plan to retire in a different country, in most circumstances your Funeral Plan will not cover you to have a funeral in that country. Funeral Plans are usually for UK funerals only.

While this can be one of the cons of Funeral Plans, you can find a plan provider who can make this into one of the pros. Some providers do offer a repatriation service for an additional fee if you live abroad but would like to have a funeral in the UK. Additionally, some Funeral Plan providers offer Funeral Plans for expats in other countries.

Tying up money

By using your money towards a Funeral Plan, you will not be able to use this money elsewhere as it may be non-refundable, or you may pay a cancellation fee if you cancel after the designated cooling-off period. So only commit to a Funeral Plan if you can afford it now, and in the future, if you choose an instalment plan.

Committing your money is another aspect of Funeral Plans that has pros and cons. Of course, by tying up your cash in a Prepaid Funeral now, it means your family are less likely to have to contribute their money in the future.

Your Funeral Plan may not cover everything

It’s essential that you read the Terms and Conditions of any Funeral Plan to avoid one of the most significant cons; that your loved ones are left with a financial burden because you did not choose a plan to covers enough of the funeral costs. For example, a direct cremation plan will typically not cover the costs associated with a funeral service that your family can attend.

Most Funeral Plan providers do not come under the regulation of the Financial Conduct Authority

At the time of writing, the Financial Conduct Authority (FCA) does not regulate Funeral Plan providers; however, this is likely to change in the future. Some providers that offer life insurance products, such as SunLife, do already come under the regulation of the Financial Conduct Authority.

If you would like peace of mind that your provider is a company that you can trust, you can look for the following:

• The provider holds client monies in an Independent Trust or has cover under the Financial Services Compensation Scheme due to being regulated by the Financial Conduct Authority
• The provider has a registration with the Funeral Planning Authority
• The provider has a history in the business
• The provider has excellent customer reviews on independent review sites
• The Funeral Plan has clear, understandable Terms and Conditions, including a cooling-off period
• The cost of the cover seems reasonable based on your knowledge of funeral costs

Some Prepaid Funeral Plans may limit your choices

One of the cons of cheaper Prepaid Funeral Plans is that your family may be very limited in the choice of the date and time of your service. The Funeral Director is likely to allocate one of the less popular time slots, which may limit the people who can attend.

If you opt for a Direct Cremation plan, this is likely to come without a provision for an attended service. You can turn this into one of the pros of the plan by letting your family know that it gives them the flexibility to celebrate your life in a unique way.

One of the ways to experience more pros than cons in these scenarios is to communicate your plans and wishes to your loved ones, so they understand and avoid emotional surprises when the time comes.

You could pay over the odds if you live in a cheaper area

Suppose you live in a part of the UK that has a lower cost of living then one of the potential cons if that you could pay higher costs than you need to. If you work with a national Prepaid Funeral Plan provider that does not price its Funeral Plans based on their customer’s location, then people in lower-cost areas may lose out.

However, this is one of the aspects of Funeral Plans that has pros and cons. Those in areas with a higher cost of living can benefit from lower costs, than if the funeral service had local pricing.

If you die soon after taking a plan you may lose out

There are pros and cons relating to Prepaid Funeral Plans based on the uncertainty around when the time to use the plan will come. One of the pros is locking in your funeral costs at today’s prices and avoiding your family having to pay a higher lump sum when the time comes. However, if you buy a plan and die soon after you may not benefit from this protection against the rising costs of the service.

If you are on a payment plan, then your family may still have to pay out a lump sum to meet the shortfall in your payments.

However, some providers will cover the full funeral costs as long as they have received your money on time for a specified period.