What are the Pros and Cons of Prepaid Funeral Plans?

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It might feel a little morbid to be thinking about your funeral, especially if you’re young and relatively healthy. However, it is something you should think about and plan for before it’s too late. Making plans and talking to your loved ones about what you want to happen when you die could save them a lot of extra heartache at what will be a difficult time. 

The fact that funeral costs continue to rise has led many people to consider funeral plans. A prepaid plan allows you to pay for your funeral in advance, protects against future cost rises, and means there’s less for your loved ones to organise.

What is a Prepaid Funeral Plan?

A prepaid funeral plan allows you to pay in advance for your funeral or the funeral of a loved one. It is a contractual agreement with a funeral plan provider, preferably one that is registered with the FPA. 

The provider helps in arranging the funeral when the time comes and ensures the items covered by the plan are paid for. 

With a funeral plan, you can agree on the type of funeral you want to have and cover the costs in advance. What this means for your loved ones is that they don’t have to worry about finding the money to pay funeral expenses.  

How Does a Prepaid Funeral Plan Work?

A funeral plan will cover most or all of the costs associated with cremation or burial. Payment can be made in one lump sum or several monthly instalments and the prices are fixed at today’s cost. 

In the funeral plan, you set out the details of your funeral including location, transport, and music. It all sounds pretty simple but there are some things to watch out for:

  • They are not guaranteed to cover all funeral expenses, so check the details of the plan thoroughly before committing
  • Funeral plans are not currently covered by the Financial Conduct Authority
  • The industry’s body, the Funeral Planning Authority is only voluntary

What is Covered?

What is covered under the terms of the funeral plan depends on the plan and provider you choose. Two main costs are associated with prepaid funeral plans: burial or cremation fees and funeral director fees. Most plans guarantee to cover the following:

  • Funeral director’s service
  • Caring for the body
  • Cremation
  • Minister’s fees

Cover may also include the following:

  • A church service
  • Transport to the service
  • Viewings

Several things are unlikely to be covered:

  • Burial costs including a plot
  • Cost of flowers
  • Headstones
  • Order sheets
  • Embalming
  • Catering   

In addition, fees for the crematorium, ministers, and doctors may or may not be covered, depending on the policy taken out. 

The Benefits of a Prepaid Funeral Plan

Peace of Mind

One of the most important benefits is that a prepaid funeral plan brings peace of mind. When a loved one dies it can be very stressful and upsetting for those left behind. Knowing that some of the planning and financial burden is already taken care of reduces some of that stress. 

Those who choose a prepaid funeral plan can rest assured that their family won’t have to deal with the emotional and logistical challenges of organising a funeral and raising the funds to pay for it while grieving the loss.  

Prepaid and Preplanned

Another important benefit is that a funeral plan ensures there will be the funds, either partially or fully, to pay for the send-off you want. 

It’s possible to make arrangements and choose specific details and ensure your funeral goes ahead as you imagine it will. There is also less scope for family and friends to fall out over your wishes. 

Avoid the Rising Cost of Funerals

By choosing a funeral plan you’re avoiding the rising costs of funerals. Essentially, you’re paying for your funeral in the future at the current price of the plan. A funeral plan reduces the risk of your family being unable to provide the funeral you wished for because of financial constraints. 

Tailored to Suit Your Budget

In general, it’s possible to tailor a funeral plan to suit your budget. Flexible payment plans are also often available. 

Funeral Planning Regulation

Funeral plans are regulated by the Funeral Planning Authority. Regulation ensures your funeral plan provider has been scrutinised and can provide the right kind of service and meet its responsibilities. 

The Disadvantages of a Prepaid Funeral Plan

Funeral Plans Aren’t Free

A prepaid funeral plan has to be paid for in advance of your death. You have to find the funds so you can make a lump sum payment or regular monthly payments. 

Not All Costs are Covered

This is an important factor to remember. Most plans don’t cover all aspects of a funeral. For example, a wake or church service may not be included. Loved ones left behind may still have to pay something towards the funeral. This is why it is crucial that you check what is and what isn’t covered. 

Some Plans Have Rules About Moving House

Not all funeral plans cover you if you move to another part of the country or overseas. 

Not Suitable For Someone Close to Dying

One of the biggest downsides is that plans are not suitable for someone whose death is imminent. 

You Can’t Access The Funds Before Death

This might seem obvious but it’s nevertheless important to remember that the funds in the funeral plan are tied up and you cannot access them. 

Now you’re more aware of the pros and cons of a funeral plan you can decide for yourself whether it’s right for you.   

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