In a word – NO – there is no such thing as Asda Funeral Plans; or for that matter there is also no such thing as Tesco Funeral Plans, Sainsburys Funeral Plans, Waitrose Funeral Plans or Morrisons Funeral Plans. Quite simply there are NO supermarket funeral plans in existence in the UK.
What Asda and the rest of the gang offer are whole of life insurance plans with a funeral benefit option – a completely different type of plan to a prepaid funeral plan.
What is a Funeral Plan?
A funeral plan is a way you can arrange and pay for your funeral services in advance; the benefit of a funeral plan being that you are paying today’s prices, therefore avoiding funeral inflation which for many years has been rather hefty to say the least at around 6% every year.
But in addition to the financial help a funeral plan offers the family, it can also relieve a lot of the emotional strain and worry that comes with arranging a funeral. With a funeral plan in place the family literally need to make one phone call and the funeral director will take care of everything.
What is a life insurance plan with a funeral benefit option?
Life insurance plans or over 50 life insurance plans as they are often referred to are insurance plans that pay out a cash sum when you die that can be used to help with funeral costs. Because they are frequently used to help families fund funeral costs, they are also unfortunately referred to as funeral insurance – which just adds to the confusion and is why many people buy them thinking they are prepaid funeral plans i.e. the so called Asda funeral plan.
For a number of years now life insurance companies have also given customers the chance to choose a free funeral benefit option. Basically the funeral benefit option gives you the opportunity to increase your cash sum in return for agreeing for your money to be paid directly to a specific funeral director as opposed to the family or estate.
What is the Asda Over 50s life cover plan?
The Asda Over 50s Life insurance plan is available from £5 a month and is provided by LV – so basically it is an LV over 50 life insurance plan adapted to suit Asda customers. If you are between the ages of 50 to 80 you are guaranteed to be accepted and are covered for your cash sum after an initial period of 12 months.
You can choose between a capped and uncapped version. The capped over 50 plan means you will never pay more into the plan than the cash sum paid out whereas this is a possibility with the uncapped version; it just depends on how long you live. It’s worth mentioning that the capped version may offer the promise of not paying more in premiums than the cash sum paid out but the sum on offer is a lot lower.
For example a 60 year old no smoker paying £15 a month would receive £3,348 a month with the uncapped version but only £2,046 with the capped.
It’s also worth mentioning that the monthly premiums are payable either for a maximum of 30 years with the uncapped plan or until you have equalled the cost of your cover with capped plan, therefore you need to ensure you are comfortable with the monthly amount.
What is the Asda Funeral benefit option?
If you choose the Asda Over 50 life insurance cover plan you can also select the free funeral benefit plan option which means you are agreeing for your money to be paid directly to a Dignity funeral director as opposed to being paid to your family or estate. In return for this you will receive an additional £300 towards your funeral at no extra cost.
It is worth reiterating – this is NOT a funeral plan. With the Asda funeral benefit option you are just agreeing to the money being paid to a Dignity funeral director. Your family will still need to make all the arrangements and they will still need to pay the balance if the cash sum doesn’t cover the cost of the funeral services.
Things to be aware of with the Asda Over 50 Life insurance plan and funeral benefit option
As I have already mentioned, with the uncapped version of the plan, there is a chance you could pay more in premiums than the cash sum paid out. Likewise with the capped version you get a lower cash sum for your money.
Also with both options the cash sum that is paid out is fixed so inflation will reduce its value over time. For example the average cost of a funeral today is around £3,900, so an Asda Over 50s life insurance plan that pays out £5,000 would cover the funeral costs. But in just 10 years if costs continue to rise at the same rate, a funeral will cost around £6,600, so in this example there is a good chance there will be insufficient funds available in the Asda Over 50s plan to cover the funeral costs.
Finally in addition to the cash sum possibly being subject to inheritance tax, there is no cash in value with the Asda Over 50 plan, which means if you cancel the plan, you won’t get any money refunded and a cash sum won’t be paid out when you die.
Is a Funeral Plan better than an Over 50s Life Insurance Plan?
This depends on what you are looking for. If you are looking for a plan that pays for your funeral costs at today’s prices and means your family will not have the worry of arranging you funeral service when the time comes – then it is worth looking at Funeral Plans – especially Dignity Funeral Plans that we recommend as it offers more guarantees for your money than most.
If you are on a tight budget and just want to leave your family with a cash sum that can help with funeral costs, then it might be worth comparing life insurance plans. Do ensure you compare over 50 plans though as the cash sum paid out can vary quite significantly.
Oh and in case you are wondering if the supermarkets offer life insurance plans, yes they do. As well as the Asda Over 50 life cover plan, you can also choose a Tesco Over 50’s Plan as well as a Sainsbury’s Over 50s life insurance plan but there are a lot more on offer too so whatever you choose to do, just make sure you compare, compare, compare.