Monthly funeral plans
Monthly funeral plans could offer you 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 funeral plan are covered.
In this guide, we explain:
How a monthly funeral plan works depends on the payment option you choose. You can choose between:
- Monthly instalment funeral plan
- Fixed monthly funeral plan
Monthly instalment funeral plans
Pay monthly funeral 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. So you may want to check the total cost of your plan will be once fully paid and understand how this compares to other funeral plans.
Monthly payments range from 1 to 20 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.
Fixed monthly payment funeral plans
Fixed monthly payment plans are completely different to regular monthly funeral plans. The main difference being that you’re covered for your funeral services after an initial period of one or two years, depending on the provider you choose*.
With this type of monthly funeral plan your money is paid into a life insurance policy, 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.
Your monthly payment is fixed, meaning it will never change and based on your age and chosen funeral plan. Monthly payments 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.
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The cost of pay monthly funeral plans will depend on the services included, over how many years you spread your monthly payments and in some cases your age. For more information on instalments with immediate cover, take a look at our Golden Leaves monthly payment options.
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With some 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.
Other 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.
Golden Leaves are the only UK company to offer monthly payments with immediate cover. You just choose a payment option you are comfortable with, pay a deposit of £49 and you are immediately covered. You can read more about their unique service in our Golden Leaves review.
Is your money safe in a monthly payment plan?
Yes, your money is safe in a monthly funeral plan. With a monthly instalment funeral plan, 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.
With a fixed monthly payment funeral plan, your money is paid into a life insurance policy, which is regulated by the Financial Conduct Authority for your protection.
Depending on your budget you may also want 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 difference is that you are not pre-arranging your funeral but instead, providing money that will help your family when you die. Money they could choose to put towards funeral costs. As the cash sum paid out is fixed, inflation will reduce its value over time.