A report exposing how cheap funeral plans can leave families with more to pay has hit the headlines again today threatening to tarnish the funeral plan industry’s reputation however this is not necessarily a bad thing. The funeral plan market has been put through its paces over the last 12 months with numerous headlines warning the public of the possible dangers of putting funerals plans in place but in truth, this negativity is much needed to drive change which will protect customers in the future.
STOP PRESS 2nd June 2018: Government announces review of the funeral plan market
Is this the end for Cheap Funeral Plans?
The ‘This is Money’ report - ‘Exposed – How that ‘Cheap’ funeral plan being flogged online could leave your family with a nasty bill in the end’ targets a handful of companies – all of which incidentally are not registered and regulated by the Funeral Planning Authority. It alleges that unscrupulous firms are:
- Pressurising customers into buying funeral plans by hounding them on the phone
- Giving false information on funeral costs and the services the funeral plans include
- Badgering customers into home visits
- Claiming to compare the whole market but in truth only offering one type of funeral plan
- Advertising that they work with reputable companies like Dignity and Co op Funeralcare when they don’t
The report is really an extension of the Fairer Finance Report published in 2017 that assessed how well the funeral planning market was working for customers. Like this recent report, it uncovered bad practise in a number of areas, although I must add that Over50choices along with the Co op and Dignity were recognised for the reputable service they offer.
Both reports call for Funeral Plan industry to be regulated so consumers will have greater protection, which as I say can only be a good thing. They highlight certain companies, especially online funeral planning services who have adopted bad practises but are seemingly getting away with it because of the lack of tight regulation around Funeral Plan sales. A potential crisis that can be averted by the introduction of a Financial Conduct Authority (FCA) type approach.
How can you be sure your funeral plan is safe?
Although this recent report is negative, putting a funeral plan in place is a good thing to do as it means your family won’t have the emotional and financial worry of arranging and paying for your funeral. You do however need to be clear on what you are getting for your money, so reading the terms and conditions is essential.
The main thing is to always ensure that the funeral plan provider you choose is registered with and therefore regulated by the Funeral Planning Authority.
The Funeral Planning Authority is the regulatory body that has a strict set of rules and code of practice its members must abide by. In order to be accepted by the Funeral Planning Authority or FPA as it is often referred to, members must demonstrate that they comply with these rules. In addition, companies have to re-register on an annual basis so these checks on the quality of service offered and security of money held are ongoing.
What to look out for when buying a Funeral Plan
In addition to ensuring your funeral plan provider is registered with the FPA, it is also important to understand what is and isn’t included in the plan. For example all funeral plans guarantee the funeral directors services but only Dignity and Co op funeral plans actually guarantee the cremation fees and minister’s fees too. All other funeral plan providers just include a contribution to help with theses costs, so there could be more for the family to pay when the time comes.
Also certain funeral plan providers will work with specific funeral directors, so don’t assume that you can buy a funeral plan and automatically use the local funeral director you prefer. If a particular funeral director is important to you, check that the funeral plan provider works with them. And don’t be fobbed off by them just saying you can nominate them in your application – you need a definite ‘yes’ that your chosen funeral director accepts their plans.
Take note of the warning signs
It is good to compare funeral plans so you can be sure you are getting the right plan for you however when looking online, the following warning signs will help;
- Avoid one page websites that don’t have much information. Often the main purpose of these types of website is to collect your information so they can sell it on or to contact you to sell you a particular funeral plan – even though they make out that they compare funeral plans across the whole of the market.
- Look to see who the online company works with or whose funeral plans they recommend. If they are a reputable company there should be nothing to hide.
- Don’t feel forced to immediately buy over the phone if you prefer to receive a brochure first. Choosing the right funeral plan is an important decision so any funeral planning company worth their salt will be happy to go at your pace and send you a funeral plan brochure to review.
- Don’t fall for the ‘cooling off period’ tactic. Some companies try to get you to commit to their funeral plan by saying you will receive all the information and will have 30 days to cancel if you are not happy with the details. This is pressure selling and they are counting on you not being bothered to cancel the plan. In this scenario always ask for the brochure first. If they say no – end the call.
- If a company claims that their plans guarantee everything and it is not a Dignity or Co op Funeral Plan, chances are they are not being entirely truthful.
At the end of the day comparing funeral plans online is a simple and convenient way to start so long as you do your homework and don’t feel badgered into buying the first funeral plan you come across. There may be a few bad apples however you can also find a wealth of information from trusted sources like the Funeral Planning Authority and the consumer champion Which?.
Just keep at the back of your mind that old adage – if something sounds too good to be true, it probably is and remember that a cheap funeral plan may end up costing your family dearly at a later date.