What are the pros and cons of prepaid funeral plans?

Weighing up the pros and cons of prepaid funeral plans is a simple approach to decide if a funeral plan is right for you.

Here are the main prepaid funeral plans pros and cons;

PROs of prepaid funeral plans CONs of prepaid funeral plans
Avoid rising funeral costs Ties up funds
Plan your funeral in advance Can only be used to pay for a funeral
Discuss end of life wishes Can't be taken overseas
Protect loved ones from financial stress Burial plot not included (if applicable)
Protect life insurance or savings May not cover third-party costs
Guaranteed acceptance for UK residents Currently not regulated by the FCA
Flexible payment options
Suit your own budget
Approved by the Funeral Planning Authority (FPA)


Below we go into each of these funeral plans pros and cons in greater detail...

Pros of purchasing a funeral plan through Reassured

Our award-winning, FCA approved, broker service can save you time and money by comparing funeral plans on your behalf.

This allows you to find the most suitable funeral plan, at the best price possible.

All funeral plans arranged through Reassured offer the following benefits:

  • Spread the cost from just £19.81* a month
  • Essential third-party fees are included
  • Guarantee to cover funeral costs**
  • FPA regulated (funds are protected)
  • Best price guarantee†

For more information or to ask any questions, get in touch with our dedicated funeral plan team.

PRO: Avoid rising funeral costs

The ability to freeze today's funeral costs is fundamentally the key pro to taking out a funeral plan.

Particularly as funeral costs have risen by over 130% since 2004, with no sign of slowing down[1].

Nowadays, a basic funeral costs on average £4,417 and the overall cost of dying has now reached £9,493 on average.

A significant (and perhaps unexpected) expense to leave behind to loved ones.

However, a funeral plan allows you to pay the price of today’s funeral and subsequently avoid these spiralling costs.

This is because providers guarantee to provide all the services in your plan, no matter how much prices increase in the future.

By 2024, a UK funeral is estimated to cost on average £5,285.

But by taking out a funeral plan, you’re able to lock-in today’s price; avoiding rising costs and saving your family money when the time comes.

Seize this opportunity by taking out a funeral plan today through Reassured.

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PRO: Plan your funeral in advance

A funeral plan provides you with the flexibility to arrange your own funeral.

You’d be able to liaise with the funeral director to plan out the details to your own personal preference.

The plan you choose can provide all the services you require for the send-off you desire.

A huge burden to relieve your loved ones from during a difficult time.

As a matter of fact, in a recent survey, only 1% of participants knew all their loved ones’ funeral wishes.

PRO: Discuss your end of life wishes

It may come as little surprise to know that death is very much a taboo subject in the UK.

A survey carried out by the Dying Matters Coalition revealed that more than two-thirds of people agreed that death is an uncomfortable topic and only 29% of those surveyed had discussed their wishes around dying[2].

Of these, 45% felt like it was because death felt a long way off and even 8% of 65-74-year-olds thought they were too young to discuss dying.

The Dying Matters Coalition believe that talking about death helps with the bereavement process, and should be encouraged.

The Coalition; ‘aim to help people talk more openly about dying, death and bereavement, and to make plans for the end of life’.

Having a funeral plan in place allows you to discuss your end of life wishes openly with loved ones.

PRO: Protect loved ones from financial stress

Not only does a funeral plan protect your loved ones from the emotional responsibility of arranging your funeral, but also protects them financially.

Many families struggle with the expense of a loved ones’ funeral and it can be financially devastating for some.

In a recent survey, 51% of participants said they had to cut down on certain aspects of a funeral to make it more affordable.

And 12% said that finding the money to pay for their loved one's funeral caused them notable financial problems.

Particularly as most of the funeral services require payment upfront, including those for third-party providers.

And waiting for funds to be released from your estate can take months or years before loved ones will be able to recover these costs.

You can reduce this financial stress from your family by having a funeral plan in place.

PRO: Protect life insurance or savings

By taking out a funeral plan, you can protect your life insurance pay out and any funds from your estate, such as savings, from increasing funeral costs.

This is because a funeral plan locks in today's funeral price, whereas other investments won't offer this protection from inflation.

Having a funeral plan in place will free up the proceeds from a life insurance policy, or funds from your estate, so that loved ones benefit from a larger cash lump sum.

PRO: Guaranteed acceptance for UK residents

A major pro of funeral plans is that there's no age limit for applicants.

Some funeral plans guarantee acceptance to customers aged 18 or over (as those arranged through Reassured).

There are also 50+ funeral plans which guarantee acceptance to customers aged over 50 only.

Unlike some forms of life insurance, there are no medical questions asked.

A funeral plan is a good alternative if you're unable to secure affordable life insurance due to your age or health.

Although, long-term funeral plan payment options for applicants over 70 may be limited.

Contact Reassured today to discuss your available options.

PRO: Flexible payment options

Prepaying for your own funeral benefits from a choice of payments options.

For example, plans through Reassured offer the following payment options:

  • Fixed monthly payments for 6 or 12 months
    Spread the cost over 6 or 12 months interest-free
  • Monthly instalments over 2- 25 years
    Spread the cost in low monthly payments up to 25 years, plus interest. If you pass away after 12 months and before all your instalments have been paid, your plan would still be in place and funeral costs will be covered
  • A single upfront payment
    This provides immediate cover, giving you and your family peace of mind from day one.

PRO: Suit your own budget

There are many funeral plans on the market, all at varying prices.

This provides you with plenty of choices to find a funeral plan within your budget.

A set funeral plan costs anything between £1,500 and £4,400 upfront.

As mentioned, this amount can be spread across low-cost monthly payments to suit your budget per month.

The cost of the plan will depend on which elements of the funeral are included in the plan.

Of course, a more expensive plan will offer a more elaborate range of services, and a cheaper plan will offer all the essential services for a funeral.

Selecting a plan that offers the maximum amount of services will ensure your loved ones are better protected from funeral costs.

Why not secure your funeral plan through Reassured today from just £19.81 a month.

PRO: Approved by the Funeral Planning Authority (FPA)

Funeral plans in the UK aren’t regulated by the FCA, but approximately 95% of plans are regulated by the Funeral Planning Authority (FPA)[3].

The FPA is a self-regulated body that provides a strict set of Rules and a Code of Practice that funeral plan providers must abide by; driving up standards in the funeral plan market.

Buying a funeral plan from an FPA approved provider gives you peace of mind that your investment is protected.

Funeral plans arranged through our broker service, are all FPA approved.

CON: Ties up funds

A funeral plan is likely to be low on the priority list compared to other essential expenses whilst you're living.

Or it may be that you'd prefer to have the spare funds to enjoy your retirement or treat the family.

However, it may be worth considering cutting back on the unessential expenses, such as mobile phone insurance, unused gym memberships and magazine subscriptions to free up funds.

Allowing you to arrange the financial protection of your loved ones.

Funeral plan cancellation policies are also really flexible, so if you change your mind at any point then this isn't a problem.

A full refund can be made within the first 30 days of starting the plan.

CON: Can only be used to pay for a funeral

A prepaid funeral plan can only be used for the purpose of your funeral.

Unlike a life insurance policy, it won't provide your loved ones with a cash pay out.

When you pass away, the funds from your plan will be disbursed only to allow the funeral directors to carry out the services for your funeral.

Although in most cases, if your loved ones so wish, they can cancel the funeral plan and the funds paid into the plan (minus a cancellation fee) will be refunded.

Once you've paid for your funeral plan, it’ll remain in place until it’s required, regardless of how long it is before you pass away.

CON: Can't be used overseas

Most funeral plans taken out in the UK won't cover your funeral costs if you emigrate and pass away overseas.

If you're on holiday when you pass away then sometimes the funeral plan provider will fly your body home, at an additional cost, before carrying out the service as arranged.

Transportation of the deceased may be covered by some travel insurance, so if you have a funeral plan in place, then it may be sensible to ensure you have this additional protection before going on holiday.

CON: Burial plot not included (if applicable)

A burial plot will need to be purchased separately to a funeral plan.

The cost of a burial plot varies greatly across the UK.

For example, London is the most expensive place to have a burial due to the lack of burial space.

The headstone or memorial will also need to be purchased separately as this is not included in a funeral plan.

CON: May not cover third-party costs

Not all funeral plans guarantee to cover third-party fees in full.

Third-party fees are the additional costs separate to that of the funeral director and can make up to 50% of the total average funeral cost.

Also known as disbursement fees, third-party fees include:

  • Cremation or burial fees
  • Doctor fees
  • Minister fees

Some funeral plan providers, such as Golden Charter, offer only a contribution towards these costs. And very few will guarantee to cover these in a plan.

Meaning, your loved ones would have to make up the shortfall.

However, funeral plans arranged through Reassured guarantee to cover all third-party fees, no matter how much prices increase.

CON: Currently not regulated by the FCA

At the moment, funeral plan providers are not regulated by the Financial Conduct Authority (FCA).

For those who don't know, the FCA regulates the UK financial services industry.

They're responsible for protecting consumers, keeping the finance sector stable and encouraging healthy competition between financial service providers.

With demand for funeral plans growing, the government are currently considering whether funeral plans should be regulated by the FCA, which will bring in tougher regulations in order to further protect customers.

Although, this doesn’t mean measures aren’t in place to protect your money.

Funeral plans are regulated by self-regulating body The Funeral Planning Authority, (see above).

Also, most funeral plans funds are held in an associated trust fund and/or in a life insurance policy with an FCA regulated insurer, including those arranged through Reassured.

Our broker service is also FCA regulated, so the FCA regulations we uphold are also applied to our funeral plan processes, providing you with extra peace of mind.

Pros of taking out a funeral plan early

Most funeral plan providers will require you to be at least 18 years old to take out a plan.

As a young person, you could save thousands with a funeral plan, as the cost of funerals are likely to be significantly higher by the time you pass away.

You can also benefit from a long-term low-cost instalment plan, that allows you to spread the cost sometimes up to 30 years.

Young people can also achieve the cheapest life insurance rates. Your life quote is usually based on your current personal circumstances, rather than how your life could be in the future.

As a young person, you're also less likely to have a poor medical history and are less likely to fall ill in the near future, therefore insurers perceive you as low-risk.

Funeral plans, are they worth it?

Even if you've other financial provisions in place for your funeral, such as life insurance, it could be worth taking out a funeral plan.

This is because a funeral plan will protect your loved ones from rising funeral costs, whilst other investments may not.

Financial provisions that don't protect from rising funeral costs include:

  • Savings and possessions from your estate
  • Death in service from your employer (not all employers provide this benefit)
  • A life insurance policy, such as an over 50s plan

So, are funeral plans worth it?

In 20 or 30 years time, a funeral plan in monetary terms may be worth a lot more, and the knowledge that your loved ones are protected in the future, is worth it.

Get in touch with Reassured to lock-in your funeral rate.

Are prepaid funeral plans a good idea?

So, we've covered the pros and cons of prepaid funeral plans in some depth.

However, you may still be wondering, are funeral plans a good idea?

Why not contact our award-winning team so you can ask all the questions you need before making a final decision?

We can also help compare multiple quotes on your behalf, providing you with all the possible options.

And the best bit is, we don't charge a fee for our services.

What is the best prepaid funeral plan?

The best prepaid funeral plan will be the one most suited to your budget and one that will fulfil all your end of life wishes.

By using an FCA regulated broker service, such as Reassured, to compare both funeral plans and life insurance quotes, you'll be able to find the right cover, at the best price.

Prepaid funeral plans compare

Protect your loved ones from the rising cost of funerals by taking out a prepaid funeral plan today.

Simply get in touch with our award-winning team to help you secure the right plan for you, at the best price.

We can compare multiple prepaid funeral plans on your behalf, providing you with all the possible options.

Funeral plans arranged through us are FPA approved and our service is FCA registered, keeping you and your money safe.

We can also offer a best price guarantee† on funeral plans purchased through us.

So, what are you waiting for?

Protect your loved ones from spiralling costs and buy a funeral plan today.

Sources:

[1] https://www.sunlife.co.uk/siteassets/documents/cost-of-dying/SL-cost-of-dying-report-2020.pdf

[2] https://www.dyingmatters.org/news/death-still-taboo-brits

[3] https://funeralplanningauthority.co.uk/

*£19.81 per month includes a £165 discount only available to Co-op members. Based on a 50 year old purchasing a Simple Funeral Plan at £3,130 after discount with 25 years payment term (total amount payable £5944.10).

**If paying by instalments, and you pass away after 12 successful monthly payments.

†Only available through our Co-op funeral plans. Doesn’t apply to the 2-25 year instalment payment plan.

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All of the funeral plans we provide are fully regulated by the Funeral Planning Authority (FPA) ensuring you and your money are protected.

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