Prepaid Funeral Plans Pros and Cons in 2021

A funeral plan is a good idea if you prefer to make your own funeral arrangements however it does have its pros and cons. For example, paying for your funeral at today’s prices avoiding inflation may seem like a great idea, but not so great if there are hidden extras.

To see whether a funeral plan is a good idea for you, we will help you understand:

  • What prepaid funeral plans are
  • Whether they are a good idea
  • The pros and cons 
  • Associated costs including monthly payment options
  • Regulation and security
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What are prepaid funeral plans

Prepaid funeral plans allow you to make your funeral arrangements in advance, paying todays prices therefore avoiding future inflation. Your money is held securely in a trust fund until required to pay for the services of a local funeral director, who will take care of everything when the time comes.

A prepaid funeral plan therefore offers three main benefits:

  1. Saves money by avoiding rising funeral costs
  2. Removes the emotional and financial worry from your family of having to arrange and pay for your funeral
  3. Helps you arrange the funeral you want at a price you want to pay

Which is why an increasing number of people believe preplanning your funeral this way is such a good idea. 

For a more detailed look at "what is a funeral plan" please visit the highlighted page.

Are funeral plans a good idea?

Funeral plans are a good idea and a great way to help family if you want to arrange and pay for your funeral in advance at today’s prices. However, a funeral plan could be a bad idea if hidden extras mean there are additional costs when the time comes.

Not all funeral plans offer the same guarantees; the majority will guarantee to cover the cost of the funeral director’s services but only include a contribution towards the cremation fees and minister’s fees which could leave the family with more to pay.

You will find all you need to know about guarantees and what to look out for in our prepaid funeral plans comparison section.

What are the pros of prepaid funeral plans?

  • Save your family money
  • Freeze costs at today’s prices avoiding future inflation
  • Remove the worry of arranging your funeral from your family
  • Plan the type of service you want in advance
  • Shop around and choose the service you want at the price you want to pay
  • Guaranteed acceptance regardless of your health
  • Portable if you move within the UK (if you choose a national plan provider)
  • Reduce inheritance tax
  • Flexible payment options with affordable monthly instalments

What are the cons of prepaid funeral plans?

  • Some funeral plans do not guarantee all of the services included
  • Not all plan providers are registered with the Funeral Planning Authority
  • Most plans will not provide cover if you move abroad
  • It will tie up your money
  • Personal wishes such as flowers or the reception will not be included

Are funeral plans regulated?

Funeral plans are not regulated by the Financial Conduct Authority however the way your money is invested in a trust fund is. In addition, the Funeral Planning Authority is the recognised industry body that regulates registered plan providers, ensuring they comply with their strict rules and code of practice.

Only by choosing a funeral plan provided by a company that is registered and therefore regulated by the Funeral Planning Authority can you be certain that the way your money is held and the service you and your family receive conforms with these rules.

How much is a monthly funeral plan?

A monthly funeral plan is an affordable way of paying for your funeral costs in advance without having the worry of paying in one go. The cost of your monthly payments will depend on the level of service you choose and over how many years you wish to pay.

Are monthly payment funeral plans a good idea?

Monthly payment funeral plans are a good idea if you want to pay for your funeral in advance but prefer to stick to a monthly budget and spread your payments over a number of years. You will pay more for a monthly funeral plan however charges vary so do compare.  

Our monthly funeral plans section provides more information on spreading your costs.  

Should I buy a funeral plan?

Whether you should buy a funeral plan depends on your personal circumstances and budget. If you want to arrange and pay for everything yourself, then buying a plan could be a good idea. Too many families get into debt paying for funerals so arranging everything in advance makes sense.

Just be certain to review the options available to you, choose a company that is registered with the Funeral Planning Authority and understand how the plan works and what is and isn’t guaranteed.

Who pays for your funeral when you die?

There is no law as such that states who pays for a funeral when you die but if plans are not already in place to cover the cost, it is usually down to the family or perhaps the executor of the estate.

If there are savings available, then the bank will usually allow payment to be made on receipt of the funeral director’s invoice. If no funds are accessible, then the person arranging the funeral will have to make the payment initially and then claim any money back from the estate once it has been settled.

Are funeral plans worth it?

Funeral plans are worth it if you are completely clear on what is included in your plan and that the provider is registered with the Funeral Planning Authority so you can be reassured that your money is held securely.

What should I do now?

If you have just started looking at funeral plans and want to know more about the advantages and disadvantage, take a look out our what is a funeral plan section for more details.  

If you are ready to look at what leading plan providers have to offer, go to compare funeral plans.

Updated 15th January 2021
by Ashley Shepherd
Ashley Shepherd

Ashley is the founder and managing director at Over50choices. With over 30 years’ experience in financial services, he has held senior roles in building societies, banks and insurance companies.

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