Are Funeral Plans better than Over 50s Life Insurance?

Apr 8, 2014
Are Funeral Plans better than Over 50s Life Insurance?

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 prepaid funeral plans and over 50 life insurance to choose from, how do you know which is the best option?

This really depends on 3 things:


•    Do you want to arrange the funeral yourself?
•    Would you prefer to leave money for your family to arrange everything?
•    What’s your budget?

Consider your needs

A prepaid funeral plan gives you the option to arrange everything in advance and save money by paying for your funeral services at today’s prices, so your family won’t need to worry about it when the time comes.


An over 50s life insurance plan pays out a fixed cash lump sum when you die that your family can use in a way they choose, which in the majority of cases is to help with funeral costs.

If you want certainty that the funeral services will be covered, then a funeral plan may be worth considering.

If 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. Do keep in mind that the cash lump sum paid out on many over 50 plans is fixed, so inflation will reduce its value over time. With funeral inflation running at around 7% 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 which gives you the opportunity to take advantage of additional free cover in return for agreeing for the cash sum to be paid directly to a funeral director to help pay towards the cost of a funeral. 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 12 and 60 months.

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

Some companies such as Golden Charter and Golden Leaves now also offer a fixed monthly payment option which provides funeral services after an initial period of between 6 months and 2 years and has lower premiums starting from around £23 that are payable for life or until your 90th birthday.

Over 50 life insurance plans range from around £7 to £50 a month depending on how much you want to pay and how much cover you want. Payments are made either until you die or until your 90th birthday so there is a chance you could pay more in premiums than the cash sum paid out. It all depends on how long you live.

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.

Last but certainly not least - compare to get the best plan at the right price.

As with most things, once you have researched the options available, compare plans to be sure you choose the best option. Taking time to compare funeral plans or compare over 50 life insurance doesn’t take long and could save you money in the long term so is certainly worth doing.

Ashley Shepherd is an Over 50s Personal Finance Expert

ashley shepherd

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