Monthly payment funeral plans
Monthly funeral plans offer an affordable way to spread the cost of your funeral. Your low cost monthly direct debit payments are fixed so will never increase and once paid, the services in your plan are covered.
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In this guide, we explain how monthly payment funeral plans work, the costs and what to look out for when choosing your plan.
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How do pay monthly plans work?
You can pay for your monthly funeral plan by instalments either with a:
- Low cost pay monthly instalment plan
- Fixed monthly plan
Low cost monthly instalment funeral plans
Low cost monthly instalment plans let you spread your payments over several years. Most UK funeral plan providers let you pay over 12 months at no extra cost. Any instalment option longer than 12 months will incur additional administration fees.
These fees vary by provider and some also charge a deposit. Therefore it’s important know the total cost of your plan once fully paid and understand how this compares to other companies.
Monthly payments range from 1 to 10 years depending on the provider and your age. Many companies now have an age threshold (typically 80 or 85) by which time your payments must be complete.
What happens if you die before completing your monthly payments?
With most monthly funeral plans, if you die before completing your instalments, the money you’ve paid will go towards the cost of your funeral and your family will be asked to pay the shortfall.
However now some providers promise to honour your funeral services even if you haven’t completed your payments without charging your family. Typically the plan will need to have been in place for at least 12 months, with all monthly payments up to date but the terms and conditions will vary by provider.
Trust based monthly payment plans
With low cost monthly instalment plans, your money is paid into a trust fund. The trust fund should be independent to the provider, which means your money is protected should anything happen to the company
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How much is a funeral plan per month?
Low cost monthly payment funeral plans start from £38.25 with Dignity. This depends on the services included and over how many years you spread your monthly payments. Watch out for providers who also charge a deposit as this will increase the overall cost of your funeral plan.
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Fixed monthly payment funeral plans
Fixed monthly payment plans are completely different to regular low cost instalment plans. The main difference being that you’re covered for your funeral services after an initial period of one or two years*.
Your monthly payment is fixed, so will never change and based on your age and chosen plan. It is payable for life or until you’re 90th birthday, so there is a chance that you can pay more in monthly premiums than cost of your funeral service. It all depends on how long you live.
Insurance based monthly payment plans
With a fixed monthly payment plan your money is paid into a life insurance plan which is regulated by the FCA. Your application is guaranteed to be accepted if you live in the UK and between the ages of 50 and either 75 or 80*.
* depending on the plan provider.
How else can you pay for a funeral by instalments?
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.