An introduction to paying for your funeral in advance

An introduction to paying for your funeral in advance main image

According to research commissioned by the National Association of Funeral Directors (NAFD) and published on the 9th of May 2016:

  • one out of every seven British adults have never given a thought to their dying and needing a funeral;
  • the proportion of those adults who never give it a thought varies according to employment status and the part of the country in which they live; and
  • a surprising one in five people who have three children or more are the most likely to remain so unconcerned about their eventual funeral arrangements.   

So what about the majority?   

The opposite side of this coin, of course, is that the majority of people give their own death and funeral at least some thought at some point in their lives.   

Yet only an estimated 7% of the population have taken advantage of one of the most effective – and typically economical – ways of planning ahead for their funeral.   

Funeral planning – what’s involved?   

Funeral planning gives you scope not only for thinking about the kind of funeral you want when you die, but also the opportunity to save for expected cost of it, or even to pay for it in advance, at today’s prices – thus also beating the almost inevitable effects of inflation.   

You have the choice between two principal ways of making provision for that expenditure:   

Over 50s life insurance 

  • this is also known as funeral insurance – gaining its name from the fact that the insurance policy is very often used as a way of helping to pay for your eventual funeral costs 
  • if you are over 50, you may sign up for this kind of whole of life insurance policy knowing that your proposal is guaranteed to be accepted and that you do not need a medical report to establish your current state of health  
  • instead, you pay a monthly premium – either for the remainder of your life or until you reach a certain age, 90, depending on the insurer – in return for which an assured cash lump sum is paid out to your partner / spouse or children whenever you die  
  • you should be aware that the affects of inflation on the cash sum will reduce its value over time 
  • the amount you have to pay each month is typically fixed at the very beginning of the insurance term and the benefits paid out when you die are also assured  
  • although these funeral insurance plans provide a cash lump sum which may be used to pay for your funeral expenses, the benefits are paid over to your beneficiaries, who need to interpret just how you might have wished the funds to be spent   

Prepaid funeral plans 

  • a prepaid funeral plan, however, does just what it says – you may plan your funeral arrangements down to the very last detail and pay for it all in advance at today’s prices  
  • because of the cost-saving benefits of prepaid funeral plans, no wonder sales of pre-paid funeral plans hit a new recordlast year of 183,500, up 25% on the previous year 
  • the money you pay over is in safe keeping, either by being deposited in a separate, independent trust fund or used to purchase a whole of life insurance policy which pays out the sum you intended to cover your funeral expenses when you die.   

Whether you opt for over 50s life insurance or a prepaid funeral plan, it may be never too early to think about the funeral arrangements you might eventually want to be met.

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