The pros and cons of funeral plans revolve around two things: which is the best plan for you (and independent advice is needed to find out) and secondly, what are the alternatives, and are they better for you?
The main alternatives to prepaid funeral plans are:
- Saving up for a funeral in a savings account.
The problem with this one is two-fold: firstly, funeral cost inflation is FAR higher than even the best interest rates available over the last few years. Also, there is always the temptation to spend it if things go wrong and the car needs repairs or the central heating dies!
2. Nasty Non Profit whole of life.
We understand that not everyone can afford a normal funeral plan, but if folk read the small print on these (and half a million people a year buy them) they would not go ahead. A typical plan has no inflation protection and will pay the same out on death after 2 years or 40 years when it will be next to useless. Worse, there is no cash value if the policy is canceled at any time – and in most cases, missing a couple of payments in old age is enough to lose the benefits.
The Pros and Cons of Funeral Plans
I know from personal experience of the pros and cons of prepaid funeral plans that they are not perfect. Such a plan will cover precisely what it says it does, in the way it says it does, and no more or less. That is why it is important to read the brochures and terms and conditions, or you could end up with a plan which just doesn’t fit in with your wishes.
A “standard” prepaid funeral plan guarantees the funeral directors fees for services set out in the plan and makes an allowance towards specific third-party costs such as the crematorium and a service at the crematorium (not a church – they will normally be more). All sorts of other things which your family might want are probably NOT covered, though you can add extra funds to most plans or go for the next plan up.
The next level plan typically adds a posher coffin and a limousine for the family. Up a level again, and you get two limousines, a posher coffin and maybe a sprig of flowers.
It really is important to get professional advice in sorting out the pros and cons of the hundreds of variations of funeral plans on the market. Lots of people end up buying products which never had the intention of paying for the funeral at all. They just provide a fixed lump sum (generally not inflation-linked) which can be used to pay a part of the funeral provided payments have not been missed.
Over 300,000 people a year decide to invest in a funeral plan these days, and most of them don’t get professional advice – which remains free to the consumer. Even more, people buy what we would consider unsuitable insurance products.
Whichever plan is right for you, whatever its pros and cons, with sensible advice, will go a long way towards easing the financial and emotional burden on others when you go. So why not use the links at the top of the page to have a chat with one of the advisers who care enough to subscribe to our Independent Research? If there isn’t one yet, but give the Research Team a call, they will be pleased to help.