The Funeral Plan market has grown dramatically over recent years and as a result has become rather confusing and in some ways misleading.
When I say misleading, I am not talking about funeral plans as such: although there are some areas that require clarification. I am actually talking about the way funeral plans are marketed; more specifically the way they are marketed online and over the phone which is giving the funeral plan market a bad name.
STOP PRESS 2nd June 2018: Government announces review of the funeral plan market
The route of the problem
Originally funeral plans were offered through funeral directors and via leading funeral plan providers such as Dignity, the Co op Funeralcare and Golden Charter. The increase in the number of funeral plans being sold as people start to realise their value has however led to an increase in companies selling these services, which is where the funeral plan market starts to suffer.
To offer life insurance and many other types of financial products to customers, you have to be authorised by the Financial Conduct Authority (FCA) as we are at Over50choices. This however is not yet the case for Funeral Plans, which is why a vast number of websites giving you the option to compare funeral plan prices have started to appear.
Using a trusted company
There have been a number of articles in Newspapers over the last few months about misleading funeral plan comparison websites so it helps to know what to look out for when doing your research online.
Firstly though I would like to address the elephant in the room. Yes Over50choices is a comparison website and yes we offer funeral plans however we also make it very clear throughout our funeral plan information that the plan we recommend is with Dignity; which is why we have been mentioned favourably in the recent Fairer Finance Report and by the Which? consumer website.
The real issue with the funeral plan market is that many so called comparison websites make out that they compare funeral plans with a range, if not all plan providers when the reality is they either only work with one or two, or they will sell your information onto a plan provider. A tad misleading don’t you agree.
What to look out for when reviewing funeral plan comparison websites
When you know what to look out for there are some clear warning signs when it comes to understanding what type of funeral plan comparison website you are dealing with.
Firstly it’s worth pointing out that many of the ‘lead generating type’ of funeral plan comparison websites will actually pay to advertise their website on Google, so may appear at the very top of your search. They will have the letters ‘Ad’ next to them meaning the company has paid to advertise and will usually appear in the top three or four positions. Websites below these paid ones will typically offer more genuine information on funeral plans, so it may be better to look at these first.
- Minimal information on funeral plans
If the website only has one or a couple of pages with very little information on funeral plans, but asks you to add your details in order to receive more information, the chances are they are going to pass your details onto a third party, so you have no idea which funeral plan provider they are linked to. Avoid this type of one page website at all times.
- Lack of clarity over which companies they work with
All websites should be very clear and up front about which funeral plan market providers they work with; if they are not they may have something to hide. Don’t be fooled into thinking that because they say they compare the whole of the funeral plan market, or they have logos of particular companies that they actually work with them as this may not be the case.
Keep in mind that no one company has the ability to sell all the funeral plans in the market place. For example Co op currently do not sell their plans using third party services and companies like Dignity and Golden Charter have either chosen not to work with comparison websites or do not work with companies that also sell funeral plans that aren’t registered with the Funeral Planning Authority.
Another indication of which funeral plan providers a company actually truly works with is to see if they give you the opportunity to purchase the plan through the website. If they give you the option to proceed to payment options and apply, then they work with that funeral plan provider. If they invite you to call for more information for a particular provider, then it probably means that they don’t work with them and they will try to sell you a funeral plan with a company they do work with.
- Ensure your money is safeguarded with the Funeral Planning Authority
Whoever you choose to go with, always ensure the funeral plan provider is registered with and regulated by the Funeral Planning Authority. The Funeral Planning Authority or FPA has a strict set of rules and code of practice as to how your money is held. In order for Funeral Plan providers to be registered, they must prove that they comply with these rules on an ongoing basis. Those funeral plan providers in the market place that aren’t registered with the FPA do not have to abide by these conditions, which is why we recommend you steer clear.
Also don’t take it for granted that the company is registered with the FPA; check for yourself. The Funeral Planning Authority website lists all of its registered companies so it easy to do.
Buying a funeral plan over the phone
It’s often a good idea to talk through the funeral plan before making your decision which is where a conversation over the phone may help, as long as the information you are provided with is accurate and you are not made to feel under pressure.
It is worth making notes on the information you are provided but to be safe, always ask for a funeral plan brochure to review before making your decision. If they are not willing to send you a brochure and try to get you to sign up over the phone with the option to cancel within the ‘cooling off period’, go elsewhere for your funeral plan.
Finally don’t be fooled into thinking that all funeral plans marketed are the same because they are not. They will guarantee to cover the funeral director’s services however these may vary. The main difference will be the way they treat the third party cremation or burial fees, so always check this out and get it in writing before you apply.
For more information on the funeral plan market, take a look at our Essential Guide to Prepaid Funeral plans.