A funeral plan is just as its name suggests, your plan for determining just what type of service is laid on for the final farewell following your death.
It puts into your own hands, rather than leaving it to your grieving family to make difficult decisions at the worst possible time, and gives you the chance to pay for the service you want at a price you can afford.
There are essentially two ways of ensuring that financial provision has been made for whatever funeral service you choose.
Over 50s life insurance
Following the principle established by some of the country’s longest established insurance companies, over 50s life insurance gives you the chance to put a little aside each month by way of the premiums required to support a lump sum cash payment when you die. Traditionally, this sum has been used to cover the costs of your funeral.
An over 50s life insurance policy has the added advantage of there being no declaration of your medical condition required and acceptance that is guaranteed. Although you need to pay monthly premiums for the rest of your life, these may be waived once you receive, say, the age of 90.
Although this may be a relatively cheap way of planning for the expense that your eventual funeral is likely to involve, there is no way of guaranteeing that the settlement from this type of whole of life insurance policy will be sufficient to cover the costs of your funeral.
Prepaid funeral plans
Funeral plans may prove more expensive compared to an over 50’s life insurance policy – since you are paying in advance rather than saving through the medium of an insurance policy – but you may take greater comfort from there being sufficient funds to cover the cost of the funeral you planned.
A prepaid funeral plan gives you the further confidence and reassurance of your money being entirely safe for the duration of the interval until your death. This is achieved by the plan provider placing the money you have paid in a trust fund or using it to buy a life insurance policy in your name which guarantees a final settlement at equal to whatever amount you paid over to the provider.
The security of the money you paid is one of the requirements of the Funeral Planning Authority (FPA), the self-regulator for this particular industry. The FPA also encourages its members to find you alternative local funeral directors if the firm you originally choose goes out of business.
Pointed out by the Consumers’ Association’s Which? magazine is the fact that different prepaid funeral plans may vary in the details of precisely what is covered. Typically, such a plan guarantees cover for the cost of the funeral directors’ services, such as viewing of the body, the funeral service itself, and vehicles used in any procession accompanying the deceased.
Costs that are usually excluded and not covered in your prepaid funeral plan are likely to be what you pay for the burial plot, flowers, and the cost of your providing a reception or wake.