What is a Funeral Plan?
A Funeral Plan is a way of prepaying for a funeral. The plan lets you fix in the cost of the funeral at today’s prices.
When you want your plan to start, your family just has to make one phone call to a local Funeral Director. The Funeral Director will already be aware of your funeral plans, and they will have been paid in advance so your loved ones won’t have to pay for your funeral. By buying a Funeral Plan now, you will protect your family from higher costs later on – and make sure the Funeral Director carries out all of your wishes as you would want.
What does a cheap Funeral Plan include?
Funeral Plans vary from plan to plan. You can choose from a very cheap basic Funeral Plan, or go for a very extravagant plan depending on your preference and budget.
Basic plans often include the following costs:
- All Funeral Director costs and support to plan funeral
- A minister to conduct the funeral ceremony
- A coffin
- A hearse
- Care of the body
- Crematorium fees
Protect your family against rising costs
The price of a funeral in the UK is rising at an astonishing rate. When you prepay for a Funeral Plan, you guarantee that you lock in the cost of a funeral at today’s prices.
So, for example, if you bought a Funeral Plan today at £3500 and the plan wasn’t used for 20 years, you wouldn’t have to pay £14,000 for the future cost. Your original Funeral Plan, which cost £3500, would cover all of the elements that your plan specified.
Funeral Plans receive protection from inheritance tax
When you buy a prepaid Funeral Plan, it is entirely outside of the reach of inheritance tax.
If you used this money as savings, with the idea of the funds being set aside for a funeral, then your family may have a nasty surprise. The money you put aside will form part of your Estate, which may be subject to inheritance tax.
How to pay for your Funeral Plan
The payment options for a Funeral Plan can be tailored around your budget to make sure that it is always affordable.
Your choices include:
- Paying for your Funeral Plan outright in one payment
- Splitting your Funeral Plan costs into monthly payments for up to 12 months and paying no interest at all on your payments. Some providers may offer a more extended interest-free period
- Pay a low deposit and then split your costs into monthly payments, sometimes up to as many as five years plus, depending on the provider and your age when you take out the policy
Some providers also offer over 50s life insurance policies as an alternative way to financially plan for a funeral. With these policies, depending on your age when you take out the policy and when you pass away, you may be paying premiums for 25 years plus. The plans typically pay out a lump sum on your death as long as you have paid two years of premiums. They may provide cover earlier than this if you die as a result of an accident.
Funeral Plan Frequently Asked Questions
How do Funeral Plans work?
With a funeral plan, you pay a lump sum or instalments towards your funeral provider at today’s prices. When the time comes, the Funeral Plan will cover the cost of the funeral, or the elements that your plan specifies, no matter how far in the future your funeral takes place.
Are Funeral Plans a good idea?
Funeral Plans are only a good idea if you are looking to:
- Make arrangements for your funeral in advance to remove stress for your loved ones in the future
- Save money for your family by securing the cost at today’s prices
- Make specific requests at the funeral
- Have peace of mind that you have arrangements in place
What is a Funeral Plan?
A Funeral Plan is a product which allows you to pay for a funeral in advance. Prepaying is particularly useful as the cost of a funeral is increasing significantly over time.
By prepaying your funeral, you secure the cost at today’s prices.
What is the average cost of a funeral today in the UK?
The costs for an average funeral can vary between £5000-£8000 depending upon the location of the funeral and the optional extras that the funeral includes.
You can pay for your funeral in advance with one lump payment, or you can split it over 12 months or more extended monthly instalments. The price of your funeral will depend on whether you decide on a cremation, a burial, a direct cremation or a funeralplan.
What is the cost of a Funeral Plan today?
The average cost of a UK Funeral Plan is between £3000 and £5000. This estimate is only a rough guide; if you are looking for a specific price, then we would recommend that you consult your Funeral Plan provider’s representative. They will be able to explain all of the various options that are available to you.
Who regulates Funeral Plans?
Funeral planning is currently not regulated by the Financial Conduct Authority (FCA), who regulate a range of financial services in the UK. However, some Funeral Plan companies offer life insurance products which do come under the regulation of the FCA.
The Financial Planning Authority (FPA) provides regulation within the funeral planning industry; however, Funeral Plan providers don’t have to join the FPA. FPA members must abide by a specific code of practice and precise rules.
What payment terms are available for Funeral Plans?
You can pay for your funeral by:
- A one-off payment
- Splitting payments over interest-free periods of up to 12 months
- An upfront deposit and monthly instalments
- Monthly instalments
Can I pick my preferred Funeral Directors?
Some Funeral Plans specify a network of Funeral Directors for you to select from, but some allow you to pick your own Funeral Director in advance. Many providers also allow you to move to another Funeral Director within their network if you decide to move within the UK.
Who can pay for a Pre Paid Funeral Plan?
You can pay for a Funeral Plan yourself, or your loved ones can pay for a plan on your behalf.
Are Funeral Plans worth the money?
Pre paid Funeral Plans offer the peace of mind of knowing that your wishes for your funeral are clear and will be put in place when the times comes, while eliminating or reducing the financial obligation for other people. There are a range of Funeral Plans and providers on the market to consider.
What is the cheapest Prepaid Funeral Plan?
Some Funeral Plan providers will expect your Estate or your family to cover any shortfall in your Funeral Plan payments. However, some Funeral Plans payout in full as long as your payments are in good standing when the time comes.
If you have bought a life insurance policy with a provider such as SunLife who offer over 50s plans, then typically they will payout upon your death as long as you have paid two years of premiums.
What if I want a choice of a cremation or burial?
Many Funeral Plans offer you the choice of a cremation or a burial funeral; however, it’s essential to check the details of the plan to be sure what cover you have. For example, it is typical for burial costs and cremation fees to be additional third party costs that are separate to the cover in the plan, or you may receive a specific allowance towards these fees.
Direct cremation plans are one specific plan for those who only wish to have the option of a cremation funeral, often without an attended service.
How can I reduce the burden on my loved ones?
Purchasing a Funeral Plan naturally reduces the financial burden upon your loved ones. The more comprehensive your plan is, the lower the chances that your family will have additional bills to pay when the time comes. What’s more, by registering your wishes for the type of funeral you wish to have, you reduce the emotional toll on your family who will then have fewer decisions to make when the time comes.
Which is the best Funeral Plan?
There are many different Funeral Plans and providers on the market, each offering various Funeral Director services and price points. Consider your needs, the support your family will need with funeral services, the cost and the reputation of each provider before selecting your plan provider. Also, think about the level of cover you need to reduce the chances of there being additional fees that your loved ones need to pay when the time comes. Sometimes lower-cost policies mean your family could pay more.
How safe are Pre Paid Funeral Plans?
Pre Paid Funerals Plans are safe when you choose a legitimate provider. Make sure to research the following when making your selection:
- 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
What services do Pre Paid Funeral Plans include?
The exact details of what a Funeral Plan covers does vary by plan and by provider. However, most basic Funeral Plans include the following items:
- Transport of the deceased to the Funeral Director
- Care of the deceased
- Funeral Director services
- A coffin
- A hearse or other suitable transport to the funeral
- Opportunity to visit the deceased in the Chapel of Rest
How do I know if a specific Funeral Plan is the best option for me?
There are numerous Funeral Plan providers on the market, all with different price points, options and contributions to third party costs, so it is best to consider your needs and then review which company is the best match for you.
You should consider if:
- The company offer you a price that is easily affordable for you now, and in the future, if you would prefer an instalment plan
- The company provide the optional extras which you will need
- You are happy with the company’s reviews and reputation
Once you have considered all of the above aspects, then you are ready to start your funeral planning with the provider that best meets your needs.
Do I need to have a health check to qualify for a Funeral Plan?
The majority of companies that offer Funeral Plans do not require their customers to undertake a medical or to answer questions about their health.
What if I change my mind after purchasing Funeral Plan services?
The majority of Funeral Plans come with a ‘cooling-off period’ during which time you can cancel your policy and receive a full refund. The average time for this is 30 days. After this period you can expect to be charged a cancellation fee of £195 upwards depending on the provider.
If you bought a Funeral Plan in the form of a life insurance policy that pays out a lump sum on your death, then these policies typically do not provide a refund if you cancel after the defined cooling-off period.
What support can I expect with my funeral planning?
With most Funeral Plans, you can specify your wishes for different aspects of your funeral. The Funeral Plan provider will give you a structured form to fill in to register your preferences. You may also have direct contact with a Funeral Director at the planning stage to agree on the plans for your funeral in advance.
When the time comes, your loved ones will typically just need to contact the Funeral Plan provider and inform them of your passing. The Funeral Director will then lead on the next steps.
What is the difference between a Life Insurance Policy and a Funeral Plan?
A Funeral Plan is different from a life insurance policy. A Funeral Plan enables you to pay the cost of your funeral in one lump sum or a pre-agreed instalment plan, which is typically of five years or less. The Funeral Plan then guarantees to supply the specific services promised by your plan.
Over 50s life insurance policies offer a different way to contribute to your funeral. You pay a monthly premium typically until your death or until you reach a specific age such as 90, depending on the plan, and the plan then promises to payout a lump sum on your death provided you have paid premiums for a certain number of years. With these plans, some customers pay premiums for long periods such as 25 years plus, depending on their age when they take out the policy.
What different options are there to pay for your funeral?
One of the most popular ways to pay for your funeral in advance is through a monthly instalment plan, for anything from 12 months, to 10 years plus available depending on your age, the type of policy and the provider.
Some providers offer Funeral Plans in the form of life insurance policies in which you pay a monthly instalment from a specific age until you reach a particular age, or until death, whichever comes sooner. These then pay out one lump sum when the time comes. With these plans, you may pay premiums for 25 years or more depending on your age when you buy the policy.
What age limits are there on Funeral Plans?
Funeral Plans often are open to anyone in the UK aged 18 or above; however, this does vary by provider. Some providers specialise in plans for over 50s, and some specify a maximum age that you can buy at the point any payment plan services are due to be fully paid. So you could organise your funeral 25 years in advance, a year before, or any other time in advance and fix your costs at today’s prices.
Where will the Funeral Planning company keep my money?
The majority of companies that offer Funeral Plans have an independent Trust Fund which keeps the clients’ monies safe by separating them from the company’s finances. An Independent Board of Trustees will typically look after the fund with support from professionals such as investment managers.
If your Funeral Plan provider offers insurance products, then it will likely be regulated by the Financial Conduct Authority. Plans that are funded by a life insurance policy will typically receive cover under the Financial Services Compensation Scheme (FSCS).
What if I have a complaint about a Funeral Plan?
If you have a complaint about your Funeral Plan, then the first step would be to contact the company who sold your Funeral Plan. If your complaint relates to a specific Funeral Director, then the company may direct you to speak with them.
If the Funeral Plan provider is not able to resolve your complaint, and the provider has a registration with the Funeral Planning Authority (FPA), you can refer your complaint to the FPA by contacting them in one of the following ways:
- Phone: 0345 601 9619
- Email: firstname.lastname@example.org
- Post: Funeral Planning Authority, Barham Court, Teston, Maidstone, Kent ME18 5BZ
Do Funeral Plans cover all funeral costs?
All Funeral Plans have different features and price points, so it’s essential to read the full details to check that specific funeral costs are in the plan. The following types of services and charges are often not included within Funeral Plans:
- Costs relating to burial plots
- Third party fees, which are also known as disbursements. These costs may not be covered at all, or you may receive an allowance towards them
- A headstone or memorial
- Funeral notices
- Floral tributes
- The costs relating to wake services, such as food and invitations
- Hymn sheets at funeral services
I’m only 25 years old. Can I buy a Funeral Plan?
Yes, if you are 25 years old, the majority of Funeral Plan providers will accept you. The exceptions to this will be providers who specialise in cover for over 50s.