The 4 Things I Learned About Funeral Insurance
Due to the sudden death of my uncle..
The death of a loved one is one of the hardest ordeals most of us will ever experience. Death isn’t only an emotional shock, however. Death can also be a financial and bureaucratic burden for the loved ones left behind.
Funeral cover is a popular option. There are a variety of insurance plans available, with different options depending on the person’s age. If you’re looking for the best funeral cover, I’m here to help.
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“Should I Find Funeral Cover for My Parents?”
About a year ago my uncle died suddenly in a car accident. At only 52, his death was a complete shock. He had no pre paid funeral plan in place. Fortunately, my parents, aunt and I were able to get my uncle’s affairs in order as well as pay for his funeral.
The process wasn’t easy, however. Due to the difficulty, my parents, who are in their 60s, decided to purchase prepaid funeral indemnity for themselves. The average age of death in the UK is age 79, so they wanted to plan now while they’re still healthy and have all of their mental facilities.
So, the three of us worked together to find the best funeral cover for their needs. Here’s everything we learned about funeral cover, including prepaid burial provision:
The Difference between Pre Paid Funerals and Funeral Plan Cover
Prepaid funeral plans can be bought at any age and include funeral-specific expenses such as a coffin, viewing and other related arrangements. Depending on the plan, all or parts of either burial or cremation are also paid for in advance.
Funeral plan coverage is a life insurance policy which pays out a fixed sum upon your death to whomever you’ve previously selected. This is usually your spouse, children or other family members. The lump sum can be used for anything, not just funeral expenses.
Funeral coverage is usually categorised by age:
- Over 50 Funeral Cover
These plans pay a fixed lump sum on death. The main advantage to these plans is they require no medical exam. However, for many people these plans might not be the best option.
The issues is that if you live long enough, the amount you pay in premiums might exceed the eventual payout. Obviously, living a long life isn’t a problem. But before you purchase this type of policy, run the numbers to see if you’re making the right move financially.
- Funeral Cover if you are Over 70
This policy will has a smaller payout, since statistically speaking the policy holder is more likely to die than a person in their 50’s. The fixed lump sum can cover basic funeral expenses. This is the same as funeral cover for over 75. As with the other policy, this is often a good choice if a medical issue prevents the purchase of other types of insurance.
- If you are aged 80 or over
Funeral indemnity for over 80's is an option for older people who want a way to cover basic burial expenses without having to take a medical exam. This policy won’t leave your beneficiaries with a lot of money. At the same time, your family won’t have to pay for your funeral out of their own pocket (or, at least, they won’t have to pay for the entire thing).
Funeral Cover Options
My parents settled on a combination of prepaid funeral insurance and funeral cover for over 50. Before I discuss why, let’s first go over the two other options available regarding funeral preparation and why those options weren’t chosen:
Create a Savings Account
You can set up a savings account at your local bank which will eventually be used to pay for your funeral. While the account will gain interest, the interest is unlikely to match inflation. When the time comes to use the money, you’ll likely find that it won’t be enough to cover the entire funeral.
Pay Directly from the Estate
There’s not always a need for funeral insurance; UK law lets banks draw directly from the account of the estate in order to pay for certain funeral expenses. The bank will need to see a death certificate as well as an itemised bill from the funeral parlour. Of course, this does not free up money for often necessary non-funeral costs such as rent, utilities and other expenses which the deceased previously provided for.
What is Prepaid Burial Insurance?
Also known as funeral cover, this is a simple way to plan, prepare and pay for your funeral years in advance. Most funeral cover plans provide for a hearse, body transport, body preparation, viewing as well as general guidance and assistance from a professional funeral director.
Generally, burial plots are not included. Aside from my parents, I also searched for cheap funeral cover for extended family of mine. The main takeaway is that burial plots and cremation services can be pre-purchased, but this is an additional cost not included in most prepaid funeral plans.
Parents Funeral Cover
Many people end up helping their parents sort through insurance funeral plans and prepaid burial insurance. Depending on their age, many older people can purchase a cheap funeral cover plan to at least cover basic burial expenses.
Beyond that, there are also plenty of options should a person of any age wish to pre-purchase various funeral services.
My parents ended up feeling very prepared. They found a prepaid funeral provider and arranged for individual modest funeral services. This way nobody has to make arrangements in the immediate aftermath of a death.
My dad purchased over 50 funeral insurance but my mum did not. Should he die in the next 10 years or so, my mum will get a fixed lump sum. This will help keep her financially stable in the event my dad passes away before he retires.
Nobody wants to think about the death of themselves or their loves ones. A bit of preparation can make a tragic event just a bit smoother to get through, however. Carefully consider your options, consider going through our funeral planning page, and purchase the type of plan which works best for your situation. This can help your family tremendously during what will be an otherwise difficult time.
FAQ - Frequently asked questions about funeral cover
What is funeral plan insurance, what are the benefits, and will it cover my funeral expenses?
There's a difference between a funeral plan, and funeral insurance. The latter would be encompassed within a life insurance policy, while the former would cover your funeral costs and burial/cremation depending on which you decided you wanted. For an in depth look into what is and is not covered please see our funeral costs page.
How much does funeral insurance cost?
The price can vary depending on the type of cover you take out, see here for sample costs, but one thing is certain, cost of funerals are increasing, so ensuring you have enough funds to cover the funeral and burial or cremation is the main thing. Ensure you and your family are not left with expensive bills to pay, at such a difficult time.
I am over 50, can you insure me? What are the upper and lower age limits?
For funeral plans, we would say between 50-80 is the optimal age range. If you are over 80 or under 50 years old, then we would point you towards our life insurance options.
Can I take out funeral insurance for my parents?
Absolutely - just fill out our form and our helpful assistants will get back to you with a no obligation quote, based on your parents' personal details.