Paying for a Funeral
Jul 31, 2013
Being a great advocate for including funeral planning as part of your everyday financial planning arrangements and having blogged already about Making a Will, I thought it was only right that I should talk about ways to pay for a funeral.
I completely understand that this will not be right at the top or everyone’s list of things to do and the majority will never have even considered it but that’s exactly why I spend hours of my time bleating on about the virtues of planning. It’s not because I’ve got a fixation with death; truly I haven’t. It’s that I’ve got a fixation with life; the life of the people I care about. I want to make sure they are protected!
So indulge me for a minute and consider the facts:
• Fact number one – funerals are expensive. The average cost of a funeral is currently more than £3,200 and that’s just for the essentials.
• Fact number two – funeral costs are increasing at an alarming rate. Costs have risen by around 7% for the past 9 years, a trend that looks set to continue.
• Fact number three – and possibly the most crucial. We are all going to die!
‘So what’ I hear you say. Well the big question here is who exactly will pay for your funeral and with what? Will it be your wife or husband; son or daughter; niece or nephew; perhaps your closest friend?
I’m not suggesting everyone rushes out and immediately buys a funeral plan or life insurance policy (although for some that may be a good idea). What I am suggesting is that you take time to think about it; think about the consequences of doing nothing.
For some, the reality is pretty bleak. An increasing number of families are having to take out loans just to pay funeral costs. I can’t begin to imagine how that must feel?
So what can you do? Well there are a number of options available to you when looking at paying for funeral costs:
Using your savings – a hassle free option but ensure you account for the increase in funeral costs. With interest rates on savings accounts at only 1.5%, there may be a shortfall when the time comes. Also make sure you won’t be tempted to dip into the pot for life’s little emergencies.
Pay from your estate – an option if you have sufficient funds. Keep in mind that unless you have a joint bank account, your account will be frozen when you die. If presented with a copy of the death certificate and an itemised account from the funeral director, the bank may agree to release funds. If not, your family would need to pay and recoup the money from the estate at a later date.
Prepaid Funeral Plans – a way that you can arrange and pay for your funeral at today’s costs, meaning you could save money and relieve your family from the worry of having to arrange everything when the time comes. These days there are a number of ways to pay for funeral plans which can make them more affordable. Just look out for what is covered as they do vary (for more information take a look at funeral Plans on our website).
Over 50s Life Insurance – life cover that is guaranteed to pay out a cash lump sum when you die that can be used in a way that suits your family (for most, this is helping towards funeral costs). You can choose from a Guaranteed life insurance plan which guarantees acceptance regardless of your health, or an Underwritten plan which has a lengthier application with health and lifestyle questions but could provide more cover for your money. As with funeral plans, you can read all about both types of Over 50 life insurance by visiting our site.
So next time you have 5 minutes, whilst you’re sat having a cup of tea, just think about what will happen. You’ll feel better for doing it.
By Ashley Shepherd