Are Funeral Plans better than Over 50s Life Insurance?


Apr 8, 2014
life insurance or funeral plan

With funeral costs rising by an alarming rate every year, it’s not surprising that an increasing number of people are looking at the various options available to help with funeral costs; but with Over 50 life insurance and Funeral Plans to choose from, how do you know which is the best option?

Well your answer to whether a Funeral Plan or Life Insurance Plan is the best option really depends on 3 things: 

•    Do you want to arrange the funeral yourself so your family won’t have the worry?
•    Would you prefer to leave money for your family so they can make the funeral arrangements?
•    What’s your budget?

Life Insurance vs Funeral Plan – the main differences

Over 50 Life Insurance and Funeral Plans are both regularly used for funerals by families throughout the UK, the main differences being:

  • With a funeral plan you are arranging and paying for your funeral in advance at today’s prices, so that when the time comes, your family just make one phone call and everything is taken care of by the funeral director, as detailed in the plan.
  • With Over 50 Life Cover, your family will receive a cash sum that can help them pay for the funeral.

So although you can use a Funeral Plan or Life Insurance to help with funeral costs, the reality is that they both achieve this in very different ways, therefore it is important to think about what you really want.



Consider yours and your family’s needs

As a prepaid funeral plan lets you arrange and pay for your funeral services in advance at today’s prices, you save money by avoiding future inflation and remove the financial and emotional worry from your family of having to arrange and pay for the funeral when the time comes.

With an over 50s life insurance plan, the cash sum that is paid out when you die gives your family the flexibility to choose how they spend the money, which in the majority of cases is to help with funeral costs.

So if you want certainty that the funeral services and costs will be covered, a funeral plan may be worth considering.

If on the other hand you think your family would prefer the money so they have the flexibility to make the decisions, then over 50s life insurance may be more suitable. When weighing up Life insurance vs funeral plans, do keep in mind that with an Over 50 plan, the cash lump sum paid out is usually fixed, so inflation will reduce its value over time. With funeral inflation running at around 5% to 6% a year, it makes sense to think about the impact this will have on the cash sum paid out when the time comes.

Also most over 50 life insurance plans these days offer a funeral benefit option. Not to be confused with a funeral plan, this free option gives you the opportunity to take advantage of extra money towards your funeral costs, typically between £250 to £300, in return for agreeing for the cash sum to be paid directly to a specified funeral director. This will also give you the chance to specify any wishes you may have regarding the funeral arrangements.



Think about the long term cost

As far as budget is concerned there are a number of options available.

Funeral plans can be paid for with a single payment of between £3,000 to £4,000 depending on your chosen level of service, or by monthly instalments of between 1 to 25 years.

The 12 month option usually costs the same as the single payment method however instalments paid for longer than 12 months will incur additional administration fees.

Over 50 life insurance plans range from around £4 to £50 a month depending on how much you want to pay and how much cover you want. You are covered for the full cash sum after just one or two years and your monthly premiums are payable until you die or until your 90th birthday; therefore there is a chance you could pay more in premiums than the cash sum paid out. It all depends on how long you live.

So if you have the money available, a prepaid funeral plan could be a cheaper option as you are freezing your costs at today’s prices. If you prefer to stick to a lower monthly budget but want cover soon, then you may prefer life insurance.

Can you get more for your money?

If you are thinking of going down the life insurance route, another option available to you if you are in good health and happy to answer health and lifestyle questions is regular whole of life insurance. It works in a similar way to the better known guaranteed over 50 life insurance plan however acceptance is not guaranteed as your application is assessed. If you are accepted, you could get at least 40% more cover for your money; in some cases 80% to 90% more so it could be worth comparing both options.



Compare Over 50 Life insurance and Funeral Plans to get the best plan at the right price.

As with most things, once you have researched the options available and resolved your life insurance vs funeral plan conundrum, it’s important to compare plans to be certain you choose the best option. Taking time to either compare over 50 life insurance or do a funeral plan comparison doesn’t take long and could save you money in the long term, so is certainly time well spent.

Which is the best funeral plan or life insurance?

Take a look at our Guide to narrow down your options


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