Prepaid funeral plans offer a simple and straight forward way of planning for your own funeral, so that it goes entirely as you might want it, and to relieve your surviving family members from having to make those delicate and sensitive decisions themselves.But there is potentially a major economic benefit too – and that is by paying in advance, at today’s prices, you may beat the prices that are likely to mount as a result of inflation and make the cost of your funeral even more expensive if you pay for it later.
Although such a plan may make a great deal of sense, here are three important questions to ask when investigating whether prepaid funeral plans are for you:
- What’s included and what does it cost?
Before signing up to any prepaid funeral plan, it is important to know exactly what you are getting for the money you pay.
Although plans may differ widely from one provider to another – and even different packages from the same provider – the cost of the funeral director’s services is typically included in your plan and, therefore, guaranteed to be covered when you eventually die.
Funeral director’s services typically cover collection of the body from the mortuary (although this may be limited to ten miles in distance), washing, clothing and laying out the body, provision of the coffin, a hearse to transport the body to the burial site or crematorium, the provision of pall bearers, and preparing the necessary paperwork.
The cost of those services may vary enormously. There are notable regional variations. Sun Life’s annual “cost of dying” report for 2016 found that although the average national cost is currently £3,897, this ranges from £3,277 in Northern Ireland to £5,529 in London.
- Cancellation
There may be occasions when you have arranged and paid for a funeral plan, but later want to cancel it – if the plan was for your spouse or partner, for example, and you subsequently separated.
Is the money you paid refundable and, if so, is any penalty payment deducted for that cancellation?
- What happens to the money you pay in advance?
Whenever you pay for something in advance, there may always be a sneaking feeling that the goods or services are simply not delivered when the agreed time comes – or that the amount paid is no longer sufficient payment for those goods or services.
This might be your – entirely reasonable – concern about paying for a funeral that might not take place until many years have passed.
To safeguard the money you paid and to support the guarantee of services being delivered as agreed, reputable funeral plan providers – that is to say, those recognised and regulated by the Funeral Planning Authority (FPA) – transfer the funds to an entirely independent trust in your name.
Other providers might instead apply the funds to the purchase of a whole of life insurance policy, which pays out a guaranteed lump sum settlement when you die.
Either of these methods of safeguarding your money and ensuring that it is available to serve the purpose for which it was intended is endorsed by the FPA’s strict code of conduct to which members must adhere.