Types of Funeral Plan: trickier than you might think!
There are many types of funeral plan and it is essential anyone considering buying one gets professional advice (the advisers listed on this site do not make a charge.) But the biggest selling “funeral plans” by far are the Over 50s Insurance Plans. I cannot trust myself to be polite about these plans or why Regulators allow them to be sold. Instead, read Martin Lewis’ article taking them apart.
Anyway, the plans below are designed to pay for funerals. Sounds daft, but it is important! In most cases, the funeral directors fee is guaranteed and there is an indexed allowance towards third party costs which varies significantly. Some plans are flexible, some are not. We believe flexibility is important as no one knows what the future holds.
1) The Cheapest Types of Funeral Plan – Direct Cremation.
Direct Cremation Funeral Plans can really offend some people. Essentially, you die, a tasteful van appears and takes you away and that is the last involvement family or friends have. If they want your ashes back they will have to pay for that at the time (typically £100 at the moment) and wait a few weeks.
2) Funeral Directors Fees ONLY.
These plans look cheap, and it is easy to think that a plan which pays the funeral director IS a proper funeral plan. But what it does NOT cover is all the third party costs which have to be paid out. These include the cost of cremation, any form of service, minister or celebrants fees, (doctors fees are often excluded as they are only payable in around 35% of cases) where relevant. No plan includes the cost of a burial plot, and the cost of digging and refilling a grave is also a third party cost. These plans have a place in the market as long as you understand exactly what they are.
3) Cut Down Funeral Plans. Cremation ONLY.
These are a new weapon in the market. They have their uses, but they ARE cut down, so make sure you aren’t buying one without realising it. With most of them, the amount of money available for third-party costs such as the cremation fee, minister / celebrant fee is cut by around a third – that is £400 in most plans. They rely on:
a) bargain basement crematorium costs which means that the cremation will be held before 9.30 or after 4 pm and anything up to 50 miles away. We really don’t like that!
b) The funeral director may well be based up to 30 miles away.
4) Standard Funeral Plans.
These cover the undertakers’ fee, including the hearse, and make an allowance of up to £1,200 (index linked) towards the cost of cremation, minister/ celebrant and doctors fee. Like all the plans that follow, you can use them for burial, but the cost of the burial plot is NOT included, and cannot be included as both cost and availability vary enormously.
5) Mid Range Plans.
The same as standard types of funeral plan, but they add a limousine for the family and sometimes a slightly posher coffin. There is a bit more flexibility about viewing the body for those that wish to.
Rather than meet the family at the crematorium, the undertaker will leave from home on request.
6) Top Range Plans.
These typically include two limousines and a posher coffin, easier viewing, and more flexibility. One plan will allow up to £20,000 to be contributed if you want to get really carried away in style – or maybe be turned into a diamond. There are all sorts of extravagant options!
Special Possibilities you should draw to our attention
a) Death overseas – a good travel insurance will bring you home, but you may wish to be dealt with overseas, and not all companies are equally good about this. If your insurance doesn’t cover bringing your body home, the cost can be well over £10,000. Being cremated abroad and the ashes coming back would be much cheaper.
b) UK Travel – some plans are far more flexible about which undertaker you use, but might well charge for bring you home. So if (for example) you live in more than one place, perhaps with different family members, our recommendation may be different.
c) Religious issues – it is much better to make these clear at the time you take out the plan, to avoid problems at the time with the funeral director being unaware of your wishes until too late.