I have previously written a blog explaining the options available to you when looking for funeral insurance, namely prepaid funeral plans and Over 50s life insurance, but how do you know which one to choose?
Well it all boils down to your requirements and budget. Do you want to leave a sum of money to help with funeral costs or would you prefer to cover all funeral expenses? Do you want to arrange everything in advance or are you happy for your family to make the decisions when the time comes? Then of course there is the crucial question, how much can you afford to pay?
Be comfortable with payments and stick to your budget
It probably makes sense to tackle the serious business of money first so let’s get personal; how much can you afford? Prepaid Funeral Plans cost between £2,000 and £4,000. A £2,000 funeral plan will guarantee the services of a funeral director; a basic coffin, transport and care of the deceased, a hearse and the funeral service but won’t include third party costs which cover the cremation or burial charges, in addition to the minister and doctor’s fees.
As you would expect, a £4,000 funeral plan would either include these additional costs or pay an allowance for them, as well as providing other services such as a high quality coffin and limousines for the family.
So the question you need to ask yourself is
“Can I afford to pay between £2,000 and £4,000 for a funeral plan?”
Spread your payments
If your answer to the above question is ‘No’, a funeral plan may not be out of the question as you could spread your payments. With this in mind you have three options:
• Instalments over 12 months – this won’t incur any additional administration fees so the price you pay will be the same as if you were making a single up front payment.
• Instalments over a longer period, up to 60 months – this option will incur additional fees so make sure you are happy with the total amount before agreeing to anything. The good thing is that this will be made clear to you in advance so you know what you are letting yourself in for.
• Fixed monthly payments – A number of funeral plan providers now offer this option. Your money is paid into a life insurance plan and your funeral services are provided after an initial period of between 6 months and 2 years. If you die within this time, your services won’t be provided but the money paid in would be returned to your estate. Fixed monthly payments offer a more affordable option with premiums starting from around £17 a month depending on your age and the level of service required however keep in mind that payments are made until you are 90 or until you die.
So questions you need to ask yourself are
“Am I happy to commit to monthly payments in order to buy a funeral plan?”
“Would I prefer 12 monthly instalments at no extra charge, longer instalments where I will pay more or lower monthly premiums until I am 90 or until I die?”
“Do I want to arrange everything in advance or would I prefer to leave some money to my family so they can arrange things the way they prefer?”
“Would I prefer cheaper funeral insurance?”
The alternative solution
If you are looking for a cheaper funeral insurance option or prefer to give your family the flexibility of deciding what they do with the money, then an Over 50 Life insurance plan may be the better option. You just need to decide how much you want to pay on a monthly basis (plans typically start from £7 a month) or how much life cover you require.
You will be covered after an initial period of 1 to 2 years but don’t forget, monthly premiums are payable until you are 90 or for life depending on the plan provider and there is a chance that you will pay more in premiums than the cash sum paid out; it all depends on how long you live! By the same token if you die after the initial period, the full cash sum would be paid out.
If you are thinking about Over 50 life insurance to help with funeral costs, it is worth looking into the funeral benefit option. It’s a free service whereby you agree for your cash sum to be paid directly to specified funeral director as payment towards their funeral services in return for additional free life cover.
Questions to consider:
“Am I comfortable paying monthly premiums for life or until I’m 90?”
“Am I happy that I could pay in more than the cash sum paid out?”
“Would I want the funeral benefit option?”
If you are now clear on the best funeral insurance option for you, take time to read the Funeral Plan Guide and Over 50 Life Insurance Guide and compare prices to be sure of getting the best plan at the right price.