A prepaid funeral plan may not be worthwhile if you’re expected to pass away soon.
This is because the cost of a funeral plan may not be cheaper than the cost of a funeral arranged at today’s going rate.
The advantage of paying for your funeral in advance is to ensure that your family won’t have any unexpected costs in the future, when funeral prices may have risen.
It may not be worth paying ahead of time if your funeral is required in the near future and your family are able to take on the arrangements.
Also, as mentioned, some funeral plans guarantee to pay out after the first 12 months (if you’re paying by monthly instalments over a long term).
This means you would need to survive the first 12 months to be eligible for this benefit and ensure that your loved ones are protected from the full cost of your chosen funeral services.
If you pass away during this initial period, then your loved ones would have to cover the remaining balance of the plan.
Unless they choose to make alternative arrangements - in which case, the funds paid towards your plan would be refunded to your estate.
Other providers won’t honour your plan if you were to pass away at any point during an instalment plan with them, which means your loved ones would still need to fork out for your funeral.
Therefore, it may be worth considering if paying in advance makes more sense than paying for the funeral at the going rate when the time comes.