Monthly Payment Funeral Plans
Monthly funeral plans are an affordable way to pre-arrange your funeral whilst sticking to a monthly budget. Most providers offer a choice of pay monthly funeral plans with fixed direct debits ranging from 1 to 25 years. This monthly cost and whether a deposit is required will vary by company.
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All providers offer instalments but some companies also give you a choice of ‘fixed monthly payments’ too which work in a very different way. We explain how these types of monthly payment options differ:
Pay monthly funeral plans
All plan providers offer monthly payment plans with various instalment options; the majority allowing you to spread your payments over 12 months with no additional fees. The company may or may not require some form of deposit, then divide the remaining balance over 12 months.
If you prefer lower monthly premiums, you can choose instalments over a longer period but this will incur additional fees. Quite simply the longer the term, the more expensive the plan will be. Once you have agreed the monthly fee though the amount is fixed and will never change, i.e. the instalment payments will not go up even if costs continue to rise.
Many providers allow payments over 3, 5 and 10 years with some also offering up to 25 year instalment plans depending on your age. It is important to understand exactly how much the plan will be once all of your instalments have been paid to ensure you are happy with total amount. The additional instalment charges do vary from provider to provider and can work out a lot higher with some however these figures are generally made clear on the documentation before you buy.
Depending on the company, your money will be paid into either an independently managed trust fund or a life insurance plan with funds being made available when the time comes. If you cancel the plan at any time after the free cancellation period which is usually between 14 and 30 days, your money will be refunded minus an administration fee which varies from plan to plan.
You are covered for your funeral services once you have completed all your instalments. If you were to die before the instalments are complete, the money you have paid to that point would be used as part payment for your funeral services and your family will just be asked to make up any shortfall. As pre-agreed, this will be at today’s prices, avoiding any inflation that may have arisen.
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How much is a funeral plan per month?
A monthly funeral plan will cost you from £16.80 per month paying over 25 years. Some providers require a deposit too however with the plan we recommend, there is no deposit and some of the most competitive monthly payments, which means you pay back less overall:
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- once the plan is paid for there is nothing more to pay, no matter when it's needed
- if you die during the payment period, all your payments will go towards your funeral and any shortfall made up by your family, but at today's prices (they will not have to pay for any price rises) potentially saving them £000's.
Fixed Monthly Payment Funeral Plans
You may think that the fixed monthly payment option is similar to instalments but in reality these two types of monthly funeral plans are quite different.
Your monthly payments are based on your age and the level of service you require. The premiums on ‘fixed’ pay monthly prepaid plans do tend to be lower compared to the instalment option so can work for some budgets however they are payable for life or until your 90th birthday; basically whichever comes first.
Depending on how long you live, there is a chance that you can pay more in monthly premiums than cost of your funeral service.
You are covered for your funeral services after an initial period of 1 or 2 years. If you were to die during this initial period, all of your premiums would be fully refunded.
If you cancel the plan at any time after the free cancellation period which is usually between 14 and 30 days depending on the plan provider, your plan will be cancelled but you won’t receive anything back.
With ‘fixed’ pay monthly plans, your money is paid into a life insurance plan and you are guaranteed to be accepted as long as you live in the UK and are between the ages of 50 and either 75 or 80, depending on the plan provider.
Your monthly budget may of course dictate the level of plan you choose however when shopping around for a monthly funeral plan, it is important to look at the services included as not all plans are the same. Making the wrong decision could mean your family has more to pay when the time comes, which is why we recommend the Dignity monthly plan. Unlike most plans, Dignity also guarantees your cremation fees at today's prices and not just your funeral director's fees.
Compare your choice of monthly funeral plans here and then get a quote.
Budget options from £3.70 a month
If a prepaid plan is still beyond your budget you may wish to consider an over 50 life insurance plan. Premiums start from as little as £3.70 a month and you will receive a cash sum when you die that can help towards paying for a funeral – the main differences are that you are not pre-arranging your funeral but instead, providing money that will help your family and as the cash sum paid out is fixed, inflation will reduce its value over time.