09 / 04 / 21
The different forms of funeral cover – which is right for you?
It’s a eureka moment when you realise it’s time to plan for your future. When that penny drops it will lead to some research into the different forms of funeral cover, and what you will find is a small but varied selection of services on the market.
Transparency time; we offer prepaid funeral plans, however we have produced this short article to provide a balanced insight into the different types of funeral cover and who they suit best, based on their circumstances and needs.
Let’s jump straight into this one then, starting with what we do best.
Prepaid Funeral Plans
Fixed price funeral plans guarantee to cover the costs of the services detailed in your plan, so that you won’t be affected by a rise in funeral costs in the future.
Funeral plans allow you to plan the celebration of your life, the way you want it to happen. You can lay out plans for a religious ceremony, or name a specific location for you to be buried or cremated.
We like to think that purchasing a prepaid funeral plan is a wise decision, particularly as they ensure the stress of planning and paying for your funeral is greatly reduced for your family.
Simply by putting a little money aside on a regular basis, you can be certain that your wishes will be respected when the time comes, and that the loved ones you will leave behind won’t have to pay a higher funeral cost in the future.
As mentioned, prepaid funeral plans fix the price of your funeral directors services at today’s price. Your money is held in the Great British Funeral Trust for when the time comes. The Trust is a separate legal entity from Prosperous Life itself, and it’s independently managed, so your money is ring-fenced to pay for your funeral when you need to access it.
Taking out a life insurance policy is a way of protecting the finances of your loved ones when you die. The aim behind life insurance is similar to a funeral plan, in that it offers a way to put money aside for your family in the future.
However, life insurance isn’t a product designed to cover the cost of a funeral. It’s important to note this difference as it could mean that when the time comes, the cash payout from your life insurance may not be enough to foot the bill of your funeral – which could leave your family out of pocket.
When a claim is made on your life insurance policy, the end result is simply a cash lump sum payment to your loved ones that they’re free to use the money however they want. With this in mind, there may be a chance that any specific funeral wishes you had hoped for may not be fulfilled.
Life insurance is beneficial for those simply looking to ensure that their families are financially stable when they’re gone, but for a secure guarantee that your funeral wishes will be granted – a prepaid funeral plan is a more suitable option.
A prepaid funeral plan assures that the cost of your funeral director’s fees are covered, so your family needn’t worry when the time comes. It also promises to fulfill your arrangements as agreed, so you can rest peacefully in the knowledge that everything’s taken care of.
When choosing to take out a plan with a reputable funeral plan provider, you’ll also benefit from the additional guidance and support offered on arranging your funeral – a service that you won’t get when taking out life insurance.
What’s more, if you do currently have a life insurance policy, you can still take out a funeral plan too, and vica versa. You’re not limited to just one type of cover, so taking out both a funeral plan and a life insurance policy can bring the best of both worlds, should you be in a position to do so.
Further reading: Funeral Plan or Life Insurance? Which is right for you?
Saving for your funeral
Saving up money towards your funeral may seem like the simplest option for many, particularly those who aren’t too clued up on funeral plans.
However, one of the many problems that may arise when simply depositing cash into a savings account, is that when the time comes there may not be enough money available to cover the cost of your funeral.
In the past decade, the average cost of a funeral has increased by 54%, with the cost of dying standing at £9,263. We’d all like to hope that we live a long and healthy life, but unfortunately, this means that we will be clueless as to how much a funeral will cost by the time we die.
When taking out a prepaid funeral plan, the cost of your funeral will be fixed at today’s prices, unaffected by inflation. This guarantees that you won’t be paying any extra for your funeral, leaving your family in a better financial position when the time comes. By relying on your life savings to pay for your funeral years down the line, this may not be the case.
Additionally, setting up a savings plan solely for the purpose of covering your funeral may not always be realistic. Other financial matters may present themselves in the future, such as care costs, emergencies, bills and so on, which may require dipping in and out of your savings pot. This can cause the funds to drastically decrease over time, whereas the money in a funeral plan will be reserved entirely for your funeral arrangements.
Finally, a savings account can be a major hold up when accessing your funds. The withdrawal process can take days, or even weeks, which can delay your funeral proceedings and cause added stress for your family at an already difficult time. With a prepaid funeral plan, you have the reassurance that your funds will be debited to your chosen funeral director promptly.
Of course, there is the option to move forward in later life without any cover at all.
While we are one of the UK’s leading providers of prepaid funeral plans, we do recognise and respect that within some cultures and communities, it is the traditional and expected norm for the family to pay for the funeral service. This can come from immediate surviving family members or the wider family contributing together to cover the costs.
Naturally this isn’t something that we would recommend, mainly because pre-paid funeral plans lock in the costs at today’s price and protect against inflation. Paying at the time of need can be incredibly costly and for that reason we would encourage everyone to look into taking out a prepaid funeral plan for someone else, something that not many people know you can do!
Prosperous Life are a leading UK funeral plan provider. If you’re looking to take out a prepaid funeral plan, or would like some further advice on your options, please don’t hesitate to get in touch with us.