When is a funeral plan not a funeral plan?
Sounds like a trick question. But it isn’t. Many websites offer “funeral plans” which are lacking in major respects:
1) The Funeral is not included in the funeral plan.
Daft isn’t it – a funeral plan with no allowance for the cost of the cremation (or burial) is hardly a funeral plan in our opinion. We’re surprised that Trading Standards don’t take them to task. But we can only assume that many people don’t look into the fine print to realise they are not buying a proper funeral plan! In some cases, even we have to look quite hard to see through these marketing ploys, so the public have little chance of realising.
2) The Funeral Plan isn’t a funeral plan – it is a life insurance policy.
Nothing wrong with life insurance policies if that is what you need.
a) Most Over 50’s life insurance plans offer no inflation protection, and with the cost of funerals going up by about half every 5 years, it won’t be long before the policy pays nowhere near enough to pay for a funeral. That is why we prefer proper funeral plans to the standard Over 50’s plans.
b) Worse still, if you die early your family may lose out, and if you live too long, you may pay far more into the plan than comes out at the other end.
c) Think it can’t get worse? Oh yes it can! To avoid Regulatory issues, most Over 50’s plans are what is call “non profit whole of life” – they never have a cash value. The effect of this is that should you ever be unable to pay, you may well lose every penny that you have paid in!
3) The Savings Account Funeral Plan.
This is the commonest of all funeral plans. Folk save up for their funeral in a deposit account which may be earning between 0.15% and as much as 1.5%, little realising that the cost of funeral has been rising at the rate of around 7% for some years. That means that a £3000 deposit account which might pretty much pay for a funeral today would only be worth a real terms £2,000 in 5 years or less than half the original amount in 10 years time. A proper funeral plan has built in inflation protection for the main costs.
How do I get advice as to which is the best funeral plan for me?
Do bear in mind that each plan offers different options from most other plans, and a single funeral plan company is never ever going to be best for everyone.
It doesn’t take very long (five minutes or so) to find out what people actually are looking for – though it can take a little longer when members point out some of the issues you may not even have considered. Just contact our local member and he or she will be happy to talk you through the options.
It is an important decision, and one on which it is wise to take independent advice rather than relying on a company salesperson whose interests are different from yours! No one sets out to buy a funeral plan which is NOT a funeral plan!