25 / 09 / 20

Funeral Plan or Life Insurance? Which is right for you?

A prepaid funeral plan is a way of ensuring that the costs of your funeral directors are covered when you die. 

We’re seeing more and more people opting to take out a prepaid funeral plan over life insurance, as it gives complete peace of mind that when the time comes, everything has been put into place for their funeral to go ahead.

Funeral plans and life insurance offer a similar end result – providing your family with a certain level of financial security when you die. The difference between the two is that life insurance simply pays out a lump sum of money to your loved ones, allowing them to use it as they wish, whereas funeral plans are an agreed arrangement that ensures all elements of your funeral director costs (physical arrangements and financial costs) have already been set into place by yourself.

From offering a great deal of flexibility in arrangements to protecting against the rising costs of funerals, there are a whole host of benefits to choosing prepaid funeral plans over life insurance.

Funeral plans take the pressure off your family

When your loved ones are grieving your loss, arranging a funeral can be very distressing. The pressure of trying to get things right, and exactly how they imagine you would want it, can be extremely upsetting for your family and can further add to their grief.

With a prepaid funeral plan, you and your loved ones can have complete peace of mind that everything is already organised and paid for. This avoids the pressure on your family to make difficult decisions at an already difficult time, as they can rest assured that you have already got everything covered and that they will be arranging a funeral as you would have wished.

grandmother and granddaughter

While nobody wants to plan their own funeral, you can take away some relief from knowing that your family can come to terms with their loss at their own pace, without having any financial or decision-making worries about the upcoming funeral.

Funeral plans are built for you, by you

Funerals are your last chance for a final hurrah and as such should be arranged to reflect your wishes, and also you as a person. This means organising the proceedings in the way you want them, and who better to do this but you yourself?

If you have any particular requests or arrangements that you would like to be made, then a funeral plan offers you the time to do this well in advance, and absorb the cost of something particularly extravagant by paying in instalments, instead of your family having to cut your requests after the fact to stick within a budget.

If you want a sombre affair, you can arrange it, if you want a party full of smiles and happy memories, you can arrange that too, and all in the knowledge that your loved ones will enjoy one last experience with you even after you’ve passed.

Funeral plans give you greater flexibility

Another advantage of prepaid funeral plans is the flexibility they give you over time to adjust your arrangements depending on your circumstances, whereas life insurance policies are rarely so. As funeral plans are bespoke to your requests you can balance the costs against what you can comfortably afford each month and make planning for your future an easier task.

elderly man holding phone

This flexibility also extends to the nature of claiming services at the time of need. As funeral services are designed solely to provide you with a funeral, every effort is made to put the plan into action whenever your family needs it most. This is where life insurance simply cannot compete, as it can take up to a few weeks for the claim to go through and a payout to be made, meaning your family could be left fronting the cash for an expensive funeral and unsure of when they will be reimbursed!

Funeral plans protect against rising costs

One of the major benefits of taking out a prepaid funeral plan today, is that it protects you from rising costs in the future. Over the last 11 years, funeral costs have increased year-on-year. The average cost of a basic funeral in 2008 was £2,432 and is now, in 2021, standing at over just under £4,500. Experts predict that by 2025 the average cost of a funeral could be more than £5,000.

With a prepaid funeral plan, the prices you pay are fixed and will never increase in accordance with the industry’s rise in fees. It’s a given that funeral costs will continue to dramatically rise over the years, and this can leave your loved ones in a very difficult situation.

If your life insurance cover or savings aren’t enough to cover the full cost of your funeral when you die, this could leave a huge financial burden on your loved ones. Prepaid funeral plans ensure that the price you pay today will cover the funeral director fees when the time comes.

Life insurance isn’t made to cover the cost of the funeral

Life insurance is a way of supporting your family financially, so that there won’t be any money concerns when you die. The money that has been left to the family can cover costs for a range of things such as debts, mortgage and every day expenses. Your family could use the life insurance money to pay for the funeral if they wanted to, however, this lump sum of money may not stretch that far.

grandparents with grandchildren

There are a number of ways you can cover the funeral cost without it coming out of your life insurance, for example with prepaid funeral plans. The plans are created to cover everything from your chosen funeral directors fees to coffins and cremation/burial fees so all of these details are taken care of.

Funeral plans ensure the full amount is spent on a funeral

Grief can cause a great deal of stress and strain on family relationships, especially when there is inheritance and funeral costs involved. With a prepaid funeral plan, you’re ensuring that there are no family arguments over who gets what, and who pays for the funeral.

Unlike life insurance, money from your estate, or any savings, a prepaid funeral plan dictates that all of that money goes towards the organising and conducting of your funeral. This gives you peace of mind that your money is going exactly where you had planned for it to go, and limits any unnecessary family feuds in the process.

Relying on other sources of money to pay for your funeral, such as the sale of your estate, can cause complications as this can take a while for the sale to be made and the money to be released, therefore delaying the funeral proceedings or leaving your family to pick up the bill in the meantime.

Health checks are not required when taking out a prepaid funeral plan

If you decide to take out a prepaid funeral plan not only will you save a lot of stress, but you will not need to undergo a medical check as prepaid funeral plans usually accept anyone without the need for a health check. When taking out life insurance you have to undergo health checks, however, if you have certain health conditions this could raise the price of your premium, meaning it will be more expensive. 

medical form

With a prepaid funeral plan, you’ll benefit from not having to fill out long medical forms which can not only be a time-consuming task, but can possibly jeopardise your chances of getting cover or at least at a fair rate. For those with underlying health conditions, prepaid funeral plans are the natural cost-effective, stress-free solution to ensuring your funeral costs are covered.

Funeral plans can be cancelled for a full refund

Where costs are concerned one of the true advantages of a funeral plan is that it is a service, and not a payout. This means that where with a life insurance policy you simply pay into a pot until you need it, often with no chance of a refund, you can instead decide to cancel a funeral plan and recover a good portion of the money you have paid in.

This means that should your circumstances change, or you simply change your mind, you have the security of knowing your money hasn’t been thrown away, and you don’t feel trapped into a policy. Prosperous Life offers a full refund to anyone who decides to cancel their plan with us within 30 days, and a full refund subject to a cancellation fee outside of this period and indefinitely.

This level of security is just another reason that more and more people are choosing to invest into a funeral plan, over an expensive life insurance policy.

Funeral plans offer a personalised service

When you take out a prepaid funeral plan this will mean you can personalise it the way you want, and easily fit everything in your price range. You will be assigned a dedicated account manager, who will be in regular contact with you, so if there are any changes that you wish to make you can contact them directly and the amendments will be made instantly.

elderly man and young lady

At Prosperous Life, we provide the best funeral plans to assist you and your family with funeral costs and we are with you every step of the way. It’s our mission to ensure all your wishes are in place so that your family don’t have this added burden at a difficult time.

Read more about our funeral plans or get in touch with a member of our team to discuss your options today.

This page is for information purposes only and by no means offering any form of advice on any regulated product that may or may not be covered under FCA rules.

Further reading and advice on funeral planning

Read all
Do funeral plans save you money?

Do funeral plans save you money?

Read more

Pre-Paid Funeral Plan Provider Prosperous Life Grows; Estate Planning To Generate £5M. 30 New Jobs By Spring 2022

Read more

Stay warm and hydrated as the colder nights close in

Read more

probate

No matter your age, it’s the right time to swot up on lasting power of attorney

Read more

Why buy a pre-paid funeral plan?

Read more

grief support

How to deal with grief – From Prosperous Life

Read more

tips for slowing down the ageing process

Growing old gracefully – Tips for slowing down the ageing process

Read more

david downie prosperous life

Q&A with David Downie

Read more

friends smiling

What does a prepaid funeral plan company do for you?

Read more

money

Basic funeral plans vs. Premium funeral plans explained

Read more