Choosing the best funeral plan to suit your specific needs requires research
Since 2004, the average cost of funerals has increased by +112% and shows no sign of slowing down.
Taking out a funeral plan not only avoids your family having to make arrangements at a difficult time, but it also means that you pay today’s prices as opposed to the inflated costs at the time of death.
But with so many different options available it can be difficult to determine which is the best funeral plan for you.
In this guide, we’ll take a look at the important considerations when choosing a plan, allowing you to make an informed decision.
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Choice of funeral director
The funeral directors affiliated with your funeral plan provider can influence the plan you opt for.
Each funeral plan provider is attached to a network of funeral directors – some bigger than others.
Therefore, if you have a funeral director in mind, it’s important to ensure the provider you use works with that particular director.
Equally, if you have not yet made a decision on your preferred funeral director, it may be best to opt for a provider with access to a wide network, providing you choice.
Having a funeral service
Not all funeral plans provide the opportunity for your family to hold a funeral service.
The majority of funeral plan providers offer a tiered approach, where you pay more for a more elaborate set of services.
Whilst it can be tempting to automatically opt for the cheapest service, many lower tiered funeral plans don’t provide the opportunity to hold a ceremony.
This means that your body is transported straight from the funeral directors to the crematorium or place of burial, without the opportunity for your loved ones to pay their respects.
If you’re looking to provide your family with this opportunity, it’s important to consider whether the selected funeral plan provides this.
Third-party funeral costs
Your funeral plan may only cover the funeral director costs, not additional third-party costs.
With regards to a funeral plan, third-party costs refer to costs separate from that of the funeral director.
For example:
- The cost of cremation
- Minister fees
- Food and drink
- Limo/car hire
- Service venue hire.
Many funeral plans provide a contribution to these costs, but the amount they contribute depends on the plan you choose.
Whatever isn’t covered by this contribution is then recovered from your estate or falls to your loved ones to settle.
Therefore, dependant on your circumstances (i.e the value of estate), it’s likely the best funeral plan for you is one that is going to cause minimal financial disruption to your loved ones.
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If you die before payment is complete
Passing away before your funeral plan payment is complete can not only affect the services you receive but can also pass financial responsibility onto your loved ones.
Different funeral plans offer different outcomes if you were to die before your chosen plan has been fully paid off.
This tends to be influenced by the payment method chosen:
- One-off single payment
- 12 interest-free monthly payments
- Payment instalment plan (over 2 to 30 years).
The most common outcomes are:
- In the instance of 12 interest-free monthly payments, the remaining balance would be requested from your estate in order to deliver the services included in your plan
- Alternatively, the plan can be cancelled and all monies paid into the plan can be returned, (minus a cancellation fee)
- Dying within the first 12 months of an instalment plan will result in all monies paid in to be returned
- Dying after 12 months of an instalment payment plan will result in the remaining balance of the plan being requested from your estate
- Occasionally, as long as all instalments are up to date prior to your death, even if the balance of your plan isn’t complete, all services included in your plan will still be delivered.
When choosing the best funeral plan for you, it’s important to consider the way in which you pay and how likely you are to pass away during these time periods.
Equally, it’s worth considering the value of your estate and the financial stress it may cause if the remaining balance was requested.
Rest of life premiums
Occasionally, payments towards your funeral plan can be required for the rest of your life. This could result in paying more into your plan than the cost of the funeral.
A common scenario is that once the balance of your plan is paid (sometimes including interest if you have selected an instalment payment plan), your payments cease and the cost of your funeral directors fees (and all other included features) are covered.
However, some funeral plans act more like whole of life insurance. Whole of life involves paying premiums for the rest of your life. Then upon your death, your loved ones receive a guaranteed lump sum pay out.
The difference in terms of a funeral plan is that rather than a lump sum being paid to your loved ones, the payment is made directly to the funeral directors to cover the cost of your funeral.
Whilst this type of plan does have obvious benefits, such as covering the entire cost of your funeral (third-party costs and wake included), it does involve making payments for the rest of your life.
This could result in you paying more into the plan than will be spent on your funeral.
Services included
The services provided with each funeral plan differ greatly, from transport to funeral type. It’s important to decide what it is you require from your plan.
Whilst it is important to consider all of the above when choosing the right funeral plan, ultimately it comes down to the plan which provides all of the necessary services you require.
Different tiered plans will offer different services at varying levels and other inclusions which may be a requirement for the solution you are looking for.
For example:
- Coffin type (basic to luxury)
- Presence of a funeral procession to the funeral location
- The inclusion of transportation for the family
- Professional will-writing service.
Consider what it is you’re looking to get from the plan and your available budget, before choosing the best funeral plan to fit your unique requirements.
Choosing the best funeral plan for you
You can save time and money, whilst securing the best funeral plan to fulfil all your wishes, by using an FCA registered broker.
With so many things to consider and such a variety of plans available, choosing the right funeral plan to suit your needs can be daunting.
Using an independent broker, such as Reassured, will help you determine what it is you’re looking to receive from a funeral plan.
It will also allow you to compare the various options available within your budget, making sure you get the very best deal.