Nothing is certain in life, they say, except for death and taxes. At least you can do something about your funeral now to help your family when the time comes, especially as funeral costs have risen significantly over the last decade.
Any method of saving towards or paying for funeral arrangements at today’s prices is going to be welcome news. Here we look at two popular options to help you weigh up whether a funeral plan or over 50 life insurance may be right for you.
Paying for a funeral in advance – prepaid funeral plans
A funeral plan enables you to arrange and pay for specific funeral services in advance. You can choose to pay in one go or spread the cost with monthly instalments over a number of years.
A prepaid funeral plan has the twin benefits of allowing you to plan your funeral arrangements down to the very last detail, and paying for them at today’s prices, effectively inflation-proofing the funeral director's costs.
This will not only save your family a lot of money, but it will also prevent them having to guess the kind of funeral you would have wanted and spare them the stressful job of arranging it.
The money you pay in advance is safely protected until needed by the funeral plan provider, who will either place the funds into an independent trust or purchase a life insurance policy on your behalf.
Upon your death, these funds will be released to the appropriate funeral director.
Exactly what is included in your funeral plan will depend on the provider you choose and your budget.
If you’d prefer a very simple cremation funeral or would like a lower cost option you could choose a direct cremation plan, which covers a cremation without a funeral service.
Help with funeral costs – over 50 life insurance
Over 50 life insurance is very different to a funeral plan but does offer a potential alternative, particularly if budget is an issue. As long as you’re a UK resident aged between 50 and 80 (or 85 if you choose SunLife), you’re guaranteed to be accepted without the need for a medical examination.
This simple whole of life insurance can provide an affordable way for you to leave some money for your loved ones when you're no longer around, money they could put towards your funeral if they wish.
Choose an over 50 plan with funeral benefit option to pay directly towards your funeral
Choose an over 50 plan with funeral benefit option and have your policy cash sum paid directly to a designated funeral director when the times, so it can be deducted from the final bill for your funeral. So, when the time comes, your loved ones would only need to make the arrangements and cover any shortfall.
Before deciding whether over 50 life insurance could help your family with funeral costs, please consider that:
The cash payout amount is fixed and guaranteed from the start of your plan, so inflation will reduce its value over time meaning it may not cover all the funeral expenses in the future.
You will need to pay monthly premiums for the rest of your life (or the age of 90 depending on the insurer).
Depending on how long you live, the cash payout may be less than the total amount you have paid in premiums.
Can you have over 50 life insurance and a funeral plan?
Yes, you can take out over 50 life insurance alongside a funeral plan.
Using a funeral plan to pay for some funeral services and decide on the arrangements in advance, can ensure your partner or children are not faced with a financial burden or difficult decisions when you die.
The cash payout from an over 50 life insurance plan could then provide some additional cash to spend on the extra touches like flowers, a headstone, and the wake. Or it could just provide a bit of cash as a gift for your family to remember you by.
So… over 50 life insurance or a funeral plan?
There are several ways to make some provision for your funeral, and which is right for you will depend on your personal circumstances, your budget and what you’d like to achieve.
As an FCA-regulated company, with over 20 years’ experience and long-standing relationships with leading Funeral Planning Authority members and over 50 life insurers, we’re here to help you compare plans and find the right solution at the best price.