We get an increasing number of calls from people looking to buy a prepaid funeral plan for their parent, so I thought it would be helpful to write a blog about the main areas we tend to talk through, just to help others who may be going through a similar situation.
Whether it is because your parent has asked for help with buying a funeral plan; you are acting on the advice of social services as your parent is about to move into a care home or you have taken control of their finances and looking to get things in order, you want to know that the funeral plan you choose provides the right level of service and support at the best price, so knowing what to look out for is important.
Cost and level of cover
The chicken and egg of buying a prepaid funeral plan; you want to choose the best level of service but at what cost. It’s difficult to separate the two, how can you choose the level of cover without knowing how much it costs, which is why I am including them in the same section.
Typically funeral plan providers offer 4 levels of cover, a limited, simple, standard and superior plan. In very simple terms, here is how they compare and a rough guide on pricing:
• A simple funeral plan includes funeral director’s services with a simple coffin and an allowance for third party costs – priced at around £3,200 to £3,500.
• A standard funeral plan includes funeral director’s services with a better quality coffin, an allowance for third party costs and one limousine for the family – priced at around £3,400 to £3,900.
• A superior funeral plan includes funeral director’s services with a high quality coffin, an allowance for third party costs and two limousines for the family – priced at around £3,800 to £4,500.
The relatively new limited plan offers the same services as a simple plan, but the cremation time slots are restricted to early or late in the day, however, they could save you a bit of money at around £2,800 to £3,100.
Third party costs
As well as the funeral directors costs and services, there are also third party costs, also known as disbursements to think about, which include cremation or burial fees and the minister and doctors charges, averaging around £850. Most plan providers include an allowance of around £1,000 to £1,100 which increases in line with RPI to cover these costs but it all depends on where your parent lives as this does vary by region.
Making it more affordable
If you and your parent prefer to spread the payments, then you can choose between the following options:
• Instalments – Choose between 12, 36, 60, 120 months. With most providers anything over 12 months will incur addition administration fees. The funeral services will be provided once all instalments have been paid.
• Fixed monthly payments – You choose a lower monthly premium from around £23 a month which is based on your parents age and is payable for life or until their 90th birthday. The money is paid into a whole of life insurance plan and your parent’s funeral services are fully covered after an initial period of between 6 months and 2 years, depending on the plan provider.
Have your say or leave it to the professionals
When buying a prepaid funeral plan for your parent, you can choose to include details like the executor of the Will, funeral music or poems to be included or maybe a preferred local funeral director. Alternatively you can just choose the level of cover required, whether it is a cremation or burial and leave the rest to your family and the plan provider to do for you.
Take control of the paperwork
If you prefer to handle everything yourself on behalf of your parent, you can choose to put the plan in their name but have all the documentation sent to you. Just complete the relevant section in the application form and all future correspondence will go through you.
Helping both parents
If you are looking to help both parents, you can either choose to buy two funeral plans or alternatively buy a joint funeral plan.
A joint funeral plan is a single plan that is placed in both your parents’ names and covers the services of the first person to die. Funds will need to be put in place to provide for the death of the surviving parent, but as many people feel comfortable that funds will be available from the sole survivor's estate, a joint funeral plan can be a cost effective option. Keep in mind though that it can take time to resolve a deceased's estate and therefore funeral costs may initially need to be paid from another source.
A number of funeral plan providers offer this service for free, meaning a joint funeral plan can cost the same as a single plan.
The main bit of advice I can give you when helping your parent is to make sure you shop around and compare funeral plans, don’t just opt for the first one you see. Also have a look online as many providers and comparison websites have additional offers that will save you money.
For more detailed information on plans, take a look at our guide to prepaid funeral plans.