Funeral Planning Case Studies

Over50choices has been selling funeral plans for 5 years and we are now sharing some of our customer's experiences to help others who are not sure whether a prepaid funeral plan is right for them.

Firstly what is a funeral plan?

It's worth recapping what a prepaid plan is and how it could help you and your family; a plan will protect your family from the stress of arranging your funeral when the time comes, as all of this will be taken care of with just one phone call.

With a funeral plan you are effectively pre-purchasing your funeral services at today's prices. You can buy a plan "off the shelf" or you can add some personal touches if you wish.

Case Studies

Here are the most frequent scenarios we have come across, but if you don't see the one that applies to you please contact us and we will be happy to provide you with free independent advice.

• Mr Jarvis wanted to know how prepaid funeral plans work?

  • How does a funeral plan work?

    With a funeral plan you are purchasing your funeral services, unlike an over 50s life insurance plan which will give you a cash sum that could be used to help pay for your funeral, leaving your family still needing to arrange your funeral.

    Once you have decided on the level of service your money is invested in a trust fund which is held, managed and audited independently to the funeral plan provider and the funeral director.

    So should anything happen to them your money is safe and will be reallocated to another funeral director.

    When the time comes your family need to make one phone call and your funeral arrangements will be taken care of for you and your family.

• Mr Ford is 52 years of age and thought he was too young for a funeral plan

  • With some funeral plan providers you can be as young as 18 years of age, but the more typical age for considering a plan is 50 plus years of age.

    As funeral plans become more popular and part of mainstream financial planning the average age is coming down. Because the way funeral plans work the younger you can afford to buy one the greater the potential financial savings; this is because when you buy a funeral plan you are freezing your costs at today's prices.

    With more of us living longer, the current expected life span is 83 for a man and 85 for a woman and with funeral inflation running at 5.5% has seen prices double since 2004, it's not difficult to see why someone in their 50's could save over £20,000 if it continues at this rate.

    Should you choose to pay with monthly payments it's likely that inflation will outstrip any additional charges, so this is still a viable option.

    So you are not too young in your 50s to purchase a funeral plan, provided you take advice and can afford either the lump sum payment or monthly payments.

• Mrs Jacobs suffered from a long term illness and wasn't sure if she would be accepted

  • Can I have a funeral plan if I am in ill health? With all funeral plans your acceptance is guaranteed regardless of your health; whether you pay monthly or as a lump sum payment.

    There are no health or lifestyle questions on the application form, so it doesn't matter whether you have minor health issues or a terminal illness.

    This also means that whether you are in ill health or healthy that you will be charged the same price

• Mrs Arthur asked about purchasing a funeral plan for her parents

  • Can I purchase a funeral plan for my parent?

    Yes, you can take out a plan for your parent(s);  you can also choose to have all the paper work come directly to you or to your parents.

    You don't need power of attorney and can set up the plan using your bank details or those of your parents if that's more appropriate.

    This can be useful if they have become incapacitated or in a care home.

     Funeral plans for your parents will enable you to make the funeral arrangements ahead of time saving you some of the emotional stress when that time comes.

• Mrs Sedgwick wanted to know whether funeral plans were an allowable purchase as her Mum was going into a nursing home

  • Is a funeral plan an allowance expense when the council assesses my mother's assets should she need to go into a nursing home? Yes, a funeral plan can be used to offset your mothers assets and therefore potentially reduce the contribution, if any, made to her long term care.

    If you would like more information on this please read our blog "What is deprivation of assets

• Mr Jones was confused by the differences in funeral plans and wanted some to understand his options

  • How do I go about comparing funeral plans?

    Most providers offer 3 levels of set funeral services, standard, midrange and superior, although they all have their own names for them. Some provide a 4th option which is a basic plan.

    Firstly we would always recommend that you choose a plan provider that is regulated by the Funeral Planning Authority (FPA) as they will provide you with a higher level of protection.

    Most of the 3 levels are similar with some exceptions so it's worth looking at the details, for example, with the Golden Charter standard plan you will have to pay extra for family viewing, but with Dignity it's included as part of their standard plan.

    Over 80% of funerals in the UK are cremation funerals, so it's important to understand that most plans only provide a contribution towards these costs.

    All plans will guarantee your funeral directors services at today's prices but not your cremation or ministers fees and this is where it can be confusing.

    The only plans that guarantee these costs are Dignity, AgeUK (which is a Dignity backed plan) and Co-op Funeralcare.

    The following funeral plan providers do NOT guarantee your cremation and ministers but provide a contribution towards them, which could leave your family with more to pay when the time comes: Golden Charter, Perfect Choice, Avalon, Funeral Planning Services, Golden Leaves, Safe Hands, Open Prepaid Funerals.

    If you are in doubt you should seek independent advice; we can help you with this.

• Mrs Shaw wanted to know if it was better to use her savings to pay for her funeral or buy a prepaid funeral plan?

  • So why buy a funeral plan if you have sufficient money in your savings account?

    The money in your savings account is probably earning around 1% interest, so it will be growing at a low rate. Funerals have increased in price by over 5% since 1980 and in the recent SunLife Cost of  Dying Report they reported that since 2004 the average cost of a funeral has nearly doubled from £1,920 to nearly £4,000.

    So you can see from a financial point of view purchasing a funeral plan will be good for your pocket and depending on your circumstances will remove the financial burden from your family when the time comes. 

    But the main reason for taking out a plan is that you have an opportunity to plan the funeral you want and remove this stressful job when you do pass away from your family; this could give you great peace of mind knowing that you have taken care of everything.

• Mr Reed thought that going direct to the funeral plan provider would get him a better deal

  • Will I get a better deal going direct to the plan provider?

    You could, but unlikely.

    Funeral plan comparison sites such as ours will show you how plans compare plus offer you an additional discount or cashback by sharing some of their commission, so it's worth shopping around.

• Mrs Smith wanted the cheapest funeral plan possible

  • Are cheap funeral plans worth it?

    If someone is offering you a cheap funeral plan you should always check what services you are getting. A basic funeral without any provision for cremation or burial fees will cost around £2,800, of course this mean that your family will be asked to pay these additional costs when the time comes, currently around £1,000.

    An alternative to having a traditional funeral service is to have what is known as a Direct Cremation, these will cost you around £1,700 but what you actually get is a very efficient way to dispose of your body when you have died and not a funeral.

    It's cheap because there is no service, no cars, no viewing; basically your body will be stored at the funeral directors until the first cheap cremation slot is available; your body cremated and the ashes returned to your family.

    When we are asked about this type of service we ask our customers to ask themselves the following questions;

    will your family be happy that they will not have an opportunity to say goodbye to you

    have you discussed your wishes with your family

    once you have passed away the next contact your family will have will be the return of your asheshave you discussed your wishes with your family After all, your funeral is for your family and friends, but if you and your family are comfortable with the direct cremation then this is a cheap option.

• Mrs Harrington wanted to personalise her funeral arrangements

  • Can I add personal touches to my funeral plan?

    Yes, as whilst you are purchasing a pre-determined set of services with a the prepaid funeral plan, all plan providers will allow you to personalise your funeral arrangements. For example, you can specify your music preferences, hymns, readings, dress, wake or party etc.

• Ms Davis wanted to know why there was such a big difference in funeral plan prices

  • The average cost of a funeral in the UK today if £3,897 according to SunLife Research and funeral plans start from around £3,500 in order to cover these costs no matter where you live in the country.

    Like any other product, product providers set their prices based on the cost of the services, their own costs and profit margins. However, some providers products come with guarantees that other plans don't and these may have an impact on the final price.

    For example Dignity and Coop Funeralcare offer to guarantee the cremation costs at today's prices regardless of when your funeral is in the future, which could save your family hundreds of pounds when the time comes.

    They may charge a little more for their plans in return for this guarantee (as at October 2016 both plans are actually cheaper than most other funeral plans).

• Mr Weaver wanted to know how safe his money is

  • Is my money safe in a funeral plan?

    All Funeral Planning Authority plan providers place your money in a trust find which is independently managed and audited, in addition it is reviewed by actuaries to ensure that there is sufficient funds to pay for all future funerals.

    As an alternative, Perfect Choice and Choice funeral plans, plus if your plan is a "Fixed Monthly Payment" option, your money will be placed in a life insurance fund which is regulated by the Financial Conduct Authority (FCA).

• Mr Martin asked whether approaching his local funeral director was a better option

  • Will I get a cheaper funeral plan through my local funeral director?

    Most people have never experienced arranging a funeral but for those that have will know how painful this can be having just lost a loved one.

    With a pre-paid funeral plan you have no need to visit your local funeral director as the funeral plan company will take care of this for you. However, if you would prefer to arrange a funeral plan directly with your local funeral director then you can do so, often this will be the same plan as you could arrange yourself and frequently at a cheaper price, although there are some exceptions.

    Most local funeral directors will sell Golden Charter or Dignity funeral plans, your Coop funeral director can only offer you a Coop funeral plan. Other plans sold by local funeral directors include; Avalon, Perfect Choice, and Golden Leave

• Mrs Robbins wanted a cardboard coffin as she thought it was a cheaper option

  • Will a cardboard coffin cost less than a traditional coffin?

     

    Currently a funeral plan comes with a traditional coffin usually a wood veneer, but you get a slightly better coffin with each level of plan.

    Cardboard coffins have become more popular as they are eco-friendly to the environment and some of them allow you to have images and pictures printed on them, as well as allowing your loved ones to write and draw personal messages.

    However, they currently come at a premium and most plan providers will charge a supplement for this usually between £250 to £400. It's similar with a wicker coffin or bamboo coffin.

     

     

• Ms Andrews was surprised how much the additional charges are when you pay for your funeral plan monthly

  • Why do companies charge you so much more when you pay monthly for a funeral plan?

    You can pay in full or over 12 months without any additional charges, however, when you spread your costs for longer than this period all providers will charge you more for the privilege.

    Some call it interest, some additional administration charges, but they both result in you paying more for the plan. Of course, if you are on a budget then paying monthly for your funeral plan maybe your only option to pre-pay for your funeral and freeze those costs at today's prices, protecting your family from these rising costs.

    Should you die during the payment period all your payments will go towards your funeral costs and any shortfall will be made up by your family.

    This means that should this happen the financial burden will be much less than had you not put the plan in place.

    To put this into context funeral costs have been rising at over 5% since 1980 and this year (2016) Sun Life reported that the average cost is now £3,897 which is nearly double what they cost in 2004 at £1,920.

    If funeral costs continue to rise at this rate they could cost:

    • 5 years £5,093
    • 10 years £6,657
    • 15 years £8,700
    • 20 years £11,731

    So despite paying more, when you purchase a monthly funeral plan this could be less than what they will cost in the future, therefore protecting your family.

• Mr Bolton wanted to know the difference between funeral plan providers that are regulated by the Funeral Planning Authority and those that are not

  • Is it safe to but a funeral plan that is not regulated by the FPA?

    The Funeral Planning Authority (FPA) is the only regulatory authority recognised by the government. 

    The Financial Conduct Authority do not regulate funeral plans, but they do regulate how your money is held under the Financial Services & Markets Act 2000.

    The NFFD, NAFD, SAIF are all trade bodies.

    The following companies are regulated by the Funeral Planning Authority:

    • Golden Charte
    • Dignit
    • Coop Funeralcar
    • Avalo
    • Perfect Choic
    • AgeU
    • Golden Leave
    • Funeral Planning Service
    • Funeral Planning Partner

    These funeral plan providers are not regulated by the FPA:

    • Safe Hand
    • Open Prepaid Funeral
    • Silver Cloud

    Our independent advice is to choose a company that is regulated by the FPA.

    Should you choose an alternative company we would suggest that you ask the following questions;

    How long have you been in business? (this is to understand whether they have a track record)

    Who are the independent auditors of the trust fund? (check that the trustees are independent and have professional qualifications)

    Can I nominate a local funeral director and will you place the plan with them now or once I have died? (all FPA regulated providers will agree with the funeral director to accept your plan at the price you have paid today for your funeral director services; this is important as they could refuse the plan when the time comes leaving your family in an awkward situation)

    If my nominated funeral director refuses to carry out the funeral and you place my funeral with an alternative funeral director will my family have to pay more? (check the Terms & Conditions before buying the plan as this will detail what happens should they refuse to perform the funeral, which could involve your family paying more money)