Funeral Insurance – What are the Options?
Dec 9, 2013
Funeral Insurance can help protect the people you care about both financially and emotionally.
By arranging everything in advance, you can save your family the upset of having to make difficult decisions; second guessing what type of service you would have wanted, what funeral music you would have chosen or how much you’d have been prepared to pay for a coffin. And not having to worry about where the money is coming from to pay for funeral costs can make what is undoubtedly a very difficult time a little less painful for all concerned.
So when it comes to Funeral Insurance, what are the options available to you?
Well you have the choice of two types of plan:
• Prepaid Funeral Plan
• Over 50s Life Insurance Plan
A Prepaid Funeral Plan gives you the opportunity to arrange and pay for your funeral in advance at today’s prices, therefore avoiding the impact of future funeral inflation. With increases of 7% per year over the last 9 years and an average funeral now costing more than £3,400, that could be quite a saving over years to come.
Typically you can expect funeral plan providers to offer three levels of cover; simple, midrange and superior plans that cover the funeral director’s fees and services, the coffin, transportation and care of the deceased, use of the chapel of rest for viewing and a hearse and limousine for the family. The latter will depend on the level of cover chosen, as will the quality of the coffin.
The majority of funeral plans also include either an allowance or full payment for what is commonly known as disbursements or third party costs. These include cremation or burial costs and the doctor and minister’s fees.
Prices vary between £3,000 and £3,900 but most plan providers offer a range of more affordable payment options which includes fixed monthly premiums from around £20 depending on your age.
Over 50s Life Insurance
Over 50s Life Insurance covers you for life, paying out an agreed amount of money when you die. The cash sum means your family has the flexibility to use the money in a way that suits their needs, whether that is to help pay towards funeral costs, settle any outstanding loans or debts or to buy something special.
When comparing over 50s life insurance, many people opt straight for the guaranteed over 50 plan which offers affordable straightforward cover with guaranteed acceptance and no medical. Whilst this can be advantageous for some, especially those with health problems, it is worthwhile looking at the underwritten version too as this could give you far more cover for your money; at least 40% extra and in many cases, a whole lot more.
The underwritten Over 50s Life insurance plan has a lengthier application process which includes health and lifestyle questions but is worth considering if you are happy to take a bit more time and effort with your application.
It’s also worth mentioning that once you have been accepted, you are immediately covered whereas with the guaranteed option, you are not covered for an initial qualifying period of either one or two years, depending on the plan. If you were to die during this time, the cash sum wouldn’t be paid but your monthly premiums would be fully refunded.
Premiums for Over 50s life insurance plans range from £4 to £50 a month but cost really depends on how much cover you want and how much you can afford to pay on an ongoing basis.
So in a nutshell if you are looking for funeral insurance that guarantees to cover some or all of your funeral costs, then a funeral plan is worth considering. If however you just want to tick that box and feel reassured that you have made some form of provision for your family but prefer to give them the flexibility of deciding what to do with the money, then an Over 50 life insurance plan may be the right option.