How Pre-Planning a Funeral can save your Family Thousands of Pounds

How Pre-Planning a Funeral can save your Family Thousands of PoundsIt’s not an exaggeration that planning and paying for a funeral in advance can quite literally save your family thousands of pounds. If you haven’t taken the time to consider whether or not you need life insurance, the costs of a funeral could catch you very much by surprise. These days the average funeral costs more than 3,400; not a small amount of money by any stretch of the imagination. However in just 10 years time, that figure could exceed 6,000, so you see, putting plans in place today really could be quite a money saver.

What are Prepaid Funeral Plans?

Prepaid funeral plans give you the opportunity to pay for funeral costs at today’s prices; effectively freezing the cost and therefore avoiding the impact of inflation.

All funeral plans guarantee to cover the cost of the funeral director’s services and many also include payment or an allowance towards third party costs, known as disbursements which incorporates the cremation and burial fees and the minister’s and doctor’s charges. You can choose to organise as much or as little as you want. If you prefer just to ensure the costs are taken care of, the plan provider will nominate the funeral director so all you need to do is decide on the level of service and payment options.

How much do funeral plans cost?

Costs depend on the level of service you choose as most providers offer a simple, standard and superior plan. If you want Flat Grave Markers, you may be looking to go on the superior plan. If you just want a cheaper send-off for your loved one, the simple plan might be ideal. A simple plan that includes the funeral directors services and an allowance for third party charges typically costs around 3,200; a standard plan which also includes a limousine for the family will be in the region of 3,500 to 3,600 and a more comprehensive superior plan which has two limousines will cost up to 4,000.

A more affordable option

Of course this is not a small sum of money for anyone to find which is why you also have the option to spread the cost with instalments. You can typically choose to pay over 1, 3 and 5 years; anything over 1 year will incur additional administration fees and you are covered for your services once you have completed your payments.

Some companies which provide funeral planning services also offer fixed monthly payment funeral plans where you pay a lower monthly premium which is payable for life or until you are 90. You are covered for your services after an initial period of between 6 months and 2 years, depending on the plan provider.

The instalment option will cost anywhere between 50 to over 300 a month depending on the term and level of service you require. Fixed monthly payment funeral plans cost between 23 and 80 a month depending again on the service you require but also your age.

An alternative solution

Fifty plus life insurance offers an alternative solution to funeral plans, especially if you prefer to leave your family some money rather than put plans in place yourself.

Fifty plus life insurance provides affordable cover with a simple application process. Basically as long as you are between the ages of 50 and 80, you are guaranteed to be accepted regardless of the state health.

You pay a monthly premium of between 7 and 50 and are covered for the full cash sum after an initial period of between one and two years. The cash sum and the premiums are fixed so will never change but that does mean that inflation will reduce its value and depending on how long you live, there is a chance you could pay more in than the cash sum paid out.

Could you get more cover?

If you are thinking about fifty plus life insurance and in good health, it may be worth looking at a regular whole of life insurance plan as it could provide at least 40% more cover. Unlike the guaranteed option, your application will depend on your health and lifestyle but if you are happy to go through a more detailed application process, you could leave you family a lot more money.

This article was written for Money Blogger by Ashley Shepherd; Managing Director of Over50choices,a personal finance and comparison website for the Over 50s, authorised and regulated by the Financial Conduct Authority.