Prepaid funeral plans let you arrange and pay for your funeral at today’s prices, avoiding future inflation, so it makes sense to put one in place as soon as possible.
The plan provider you choose will determine at what age you can buy the plan, but it’s safe to say that funeral plans aren’t just for the over 50s.
Am I too young to buy a funeral plan?
Unfortunately the cost of a funeral has risen above inflation for many years, so freezing those costs at today’s prices, avoiding future inflation could save you hundreds if not thousands of pounds. So the younger you are when you buy the plan, the more money you stand to save your family.
Whilst some prepaid plan providers offer funeral plans for over 50s only, many offer their services to anyone aged 18 and above, so a range of options are available.
But am I too old?
A funeral plan is not like life insurance where you pay to cover a risk; a risk that grows the older you get. With a prepaid plan you are paying for your funeral service in advance; so regardless of whether you are in your 70s, 80s or 90s, your age doesn’t matter.
The one exception to the rule here is if you choose to pay by instalments. The majority of plan providers offer monthly instalment funeral plans, the terms for which vary. Some companies offer a range of payment options between 1 and 25 years whilst others limit instalments to 10 years.
Although there will be a range of payment options to choose from, most companies require you to have completed your instalments by a certain age; usually 80 or 85.
So for example if the plan states that payments have to be complete by the age of 85, the maximum term an 80 year old could apply for would be a 4 year plan.
As mentioned, the terms vary from company to company so it is worth shopping around and comparing the monthly options available to you before making your choice.
Will my funeral costs still be covered in 20 or 30 years time?
Once paid for, all of the services that are guaranteed in your funeral plan will be fully covered with nothing more to pay – no matter when it is in the future.
An important point to clarify here is that this only applies to the services that are fully guaranteed, so you need to be clear on the difference between ‘guaranteed funeral plans’ and ‘contribution style plans’, as the latter could leave your family with more to pay.
What is a contribution style plan?
Whilst all funeral plans fully guarantee the funeral directors costs, the majority of plans only include a contribution or allowance towards your third party costs; essentially your cremation or burial fees, the ministers charges and the doctors fees for a second death certificate if applicable.
So in terms of what is and isn’t guaranteed with this type of funeral plan, the following applies:
- Funeral directors help and guidance with documentation
- Their services on the day
- Care of the deceased
- Use of the chapel of rest *
- The Coffin
- Limousine *
- Cremation or burial fees
- Minister or officant’s fees for conducting the service
- Doctors fees if applicable
*depending on the level of service you choose
How does the allowance for third party funeral costs work?
The majority of contribution style funeral plans currently have an allowance of between £940 to £1,100, which, depending on the plan provider, grows on an annual basis in line with either RPI, CPI or the trust fund.
When the time comes, if the third party costs are less than the allowance, they will be fully covered with nothing more to pay. If on the other hand there is a shortfall, your family will be asked to pay the difference.
Do any funeral plans guarantee all of these costs?
If you prefer a plan that offers more guarantees, then Dignity and Co op Funeralcare can help as they are the only two companies that do this.
Dignity provide funeral plans for over 50s that guarantee the cremation fees and ministers fees, in addition to the funeral director’s costs for a cremation funeral.
Dignity funeral plans do still include an allowance of £1,120 for burial fees if you prefer this option but are more flexible than many other providers as they let you use the allowance for anything to do with the burial, such as purchasing the plot. And if there is any money left over, they actually pay it back to the family or estate.
Available to anyone over the age of 18, Coop funeral plans offer a full guarantee for third party costs regardless of whether they are for cremation or burial but you would need to purchase your own plot.
So as long as you are at least 18 years old, you can buy a funeral plan; you just need to be clear on the guarantees you are getting for your money and for your protection, that the company you choose is registered with and therefore regulated by the Funeral Planning Authority.