DON'T Take a plan out until you are sure about these details: This may differ from one regional area to another, so make sure you ask about specifics such as type of coffin, relocation distance, limo, doctors, cremation, minister's fees, the wake, etc.
It's really important to read the small print whichever you choose, especially with regards to funeral costs as that can encompass a whole host of things (see below). For example some life insurance policies may have stipulations based on the age of the insured. Likewise, ensure that in the case of a funeral plan, guaranteed payment covers funeral costs.
DO Ensure there are a number of funeral directors locally that come included with your plan.
One of the best benefits of a funeral plan compared to life insurance is that it guarantees you receive agreed upon services without any difference in pricing. This is actually a key point as prices are rising year-on-year.
As that may be something they don't offer cover for. For example, 'green burials' or natural burials may include different necessities from one provider to the next.
Some funeral plan providers also have set plans for example, basic, intermediate and advanced; which cover the basics, this on one hand make things more practical, but on the other may miss out things that you want for the funeral. So that depends on individual requirements.
Many families are struggling to make ends meet and unfortunately when a death occurs in the family; dealing with the grief can be extremely difficult and stressful.
Having to pay for a funeral without having the funds to hand can be an added source of pressure and stress. Knowing that it's covered means it's one less thing for you (and loved ones) to worry about, as well as being able to afford exactly the kind of funeral you want. Planning ahead will mean less chance of financial stress for your family to worry about.
Death happens to us all and although it's a morbid subject to deal with, alas it has to be dealt with. The best way by far is tackling it head on, as apposed to waiting until the event happens, and not being prepared financially for it - potentially leaving family members to have to find funds themselves.
Take into consideration the fact that if you are cohabiting in an owned or rented property with family, a house sale may not be the most practical thing to do in order to pay for your funeral. Raising the funds required to pay for a funeral can take longer than expected.
In some cases a Grant of Probate is required (from the court) before anything is allowed to be sold. The question is really, 'can my family fund my funeral when I die?' without using funds from your estate/belongings, or taking on debt.
Is it possible to pay for my funeral with alternative options?
Yes, there are 3 other ways it can be done. Depending on personal budget, situation & circumstances.
Pay for your funeral ahead of time, plan your funeral the way you would want it. Flexible monthly payment options.
You could potentially leave a cash lump sum for loved ones, which they could in turn utilise to fund your funeral expenses.
Premiums are usually tailored to individuals, so can be quite affordable.
Required to continue paying for life otherwise policy becomes void (in most cases). Possibility of paying in more than what gets paid out - Read the small print.
It is entirely possible to save something every month to be able to afford all the funeral expenses. This could involve setting up a savings account with a monthly standing order so it accumulates automatically.
The cost of funerals is actually going up year on year, so you would need to make sure it can cover that eventuality also. Another consideration is if care, or emergency situations are required, more savings will be needed to pay for it.
With savings or a cash ISA, probate will be required to access/withdraw the funds, performed by your executors, which can be very time consuming.
A government scheme does exist, for those who are eligible for it, that can offer financial support, however it is not guaranteed.
Statistics from the tax year 2014/2015 report that just over half (58%) of those who requested government help with funeral costs actually received the funds.*
On average, each individual case received £1,375 towards the cost of funerals. This would clearly not be sufficient for a basic funeral. However, it would mean that less is required to cover the remaining expenses.
*Source Annual Report by the Secretary of State for Work and Pensions on the Social Fund 2014/2015.
Further Reading & Resources...