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Funeral Guide Helper
Funeral Guide Helper

Some Alternatives To Funeral Plans

The funeral plan industry doesn’t really wish you to know this little fact but there was a life or should it be death before pre paid funeral plans got so popular. 

 

Let’s delve into the alternative ways of arranging a funeral in advance or at least paying for one in the immediacy of death and discover why exactly funeral plans could be the better choice.

Are Life Insurance Policies Equal To Pre Paid Plans?

These policies have been the lifeblood of insurance and assurance companies for decades. They are a trusted product that your parents and grand parents probably had in place and you probably should too, perhaps.

 

The idea behind a life insurance policy is that it pays out a sum of money upon your death which can be used by a Wife, Husband, Son, Daughter to help them cope when you depart, because life does get difficult financially if either a pension or working income disappears overnight or an estate is not substantial enough a ‘gift.’

 

The closest related product offered by a life insurance company is an Over 50’s plan. 

 

You may notice that some pre paid funeral plans only accept this age group also. The money paid out is a much lesser sum, £3000 to £10,000 and isn’t created to pay off a mortgage or other debts, simply a funeral or other items that may need paying off upon your death.

While the funeral plan industry does have its issues sometimes, the life assurance product has had more revelations in recent years. 

 

Can you imagine paying week after week for the rest of your life and a life insurance policy would pay out less than what you paid in?

 

That sometimes there isn’t even a cut off point and if you live past 80 when the policy may have broken even, you’d still pay and make a loss? 

 

There are correct life insurance products, the bad and then there’s pre paid funeral plans which are a limited term monthly payment schedule and your funeral costs are met as agreed.

Are Savings Accounts Better Than Funeral Plans?

It used to be the case that savings rates would do as swimmingly as the growth of the country. 

 

Not being an economist I don’t know why the economy notches up good results but the Bank of England keeps rates so low. 

 

Perhaps in part because the money fed into the system isn’t actually real and is termed Quantitative Easing. Oops.

 

Let’s take a for instance. 

 

The UK remains with low rates, 2% annually and the bank miraculously gives you slightly above at 3%. Yet during the same decade funeral expenses increase on average 8.7% a year. 

 

You put £25 a month into savings for ten years but also pay £25 a month into a pre paid funeral plan.

 

If you kick the bucket on ten years and day one, which financial product will save the day? The savings account at 3% annual interest or the funeral plan trust fund managed and pegged at funeral inflation rates to cover the cost of funeral needs whenever because the FPA audit and review the trust fund nominees annually?

 

How’s about the Over 50s life assurance product, if you died within two years of taking it, your partner may only get the money paid in and no return on the investment – as in that time the insurance company profiteered on your monthly payments.

Paying A Funeral From The Deceased's Estate

You can of course simply leave everything alone and hope for the best. 

 

If you suddenly die I don’t quite know how you’ll know you have enough in the bank having just got back from holiday, or quite figured out how your Wife is going to release equity from your home within seven days, but you may feel that an Estate can be managed and bills and funeral paid.

 

In essence however, should you die and if there’s a Will and Testament the Executor will have the powers to ask the bank for some money in any bank account to pay for the funeral, in advance of Probate clearing. 

 

Depending on the size of an Estate left behind it can take a while. I did it in a day but I was living abroad and the property was of small value – as considered by the government.

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Funeral Plan Review Summary

We’re not financial advisors, whichever choice you take to cover payment for your own funeral is entirely your own. 

 

In our view however a pre paid funeral plan is the closest way financially to meet the costs of a funeral head on, because all the services listed will be paid for unless small print suggest otherwise.

 

Your family or partner does not have to: 

 

  • Scramble around for cash support in the immediate hours of your death. 
  • Does not need to receive a poor paying life assurance product which only contributes a part.
  • Nor do you have to rely on what’s left in the piggy bank or remortgage the home you live in.
  • Pound for pound, a pre paid funeral plan should pay the way.

 

 

 

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