Pre-Paid Funeral Plans Pros and Cons
What is a Prepaid Funeral Plan?
A prepaid funeral plan enables customers to pay in advance for their funeral or the funeral of a loved one. It is a contractual arrangement with a funeral plan provider, ideally, a provider registered with the FCA, who will assist in arranging the funeral when the time comes and ensure the items covered by the plan are paid for. Prepaid funeral plans allow you to agree on the type of funeral you wish to have and cover the costs in advance so that your loved ones don’t need to worry about finding the money to pay funeral expenses in addition to dealing with the emotional burden.
Other Reasons People Choose a Prepaid Funeral Plan
Funeral plans allow you to shop around and find the best provider for the type of funeral you would like when it is easier to do so. You can also choose how much you wish to spend on various elements of the funeral. Plans help avoid the risk of future inflation of costs for those elements included in the plan. It is important to note that pre-paid funeral plans may not always cover all costs associated with your funeral and you should ensure you fully understand what is and is not covered.
A pre-paid funeral plan can provide peace of mind that everything is taken care of, so that family members can rest assured that the arrangements are covered when you pass away. Additionally, the opportunity to get your affairs in order in advance is a huge benefit for many people who want to know that their last wishes will be carried out without any hitches or disputes.
How Do I Choose Between Pre-Paid Funeral Plans?
There are a few factors to consider when choosing a pre-paid funeral payment plan. Firstly, your budget will impact how much you have to spend and whether you have sufficient funds to pay for the plan in one lump sum or if you would like to pay for the plan in instalments. It’s also important to note that there are pros and cons to every funeral plan, so you need to read the details carefully of the plans you’re considering so you know exactly what is included. Assessing every detail of your funeral and treatment in the case of death is not an enjoyable experience for anyone, but it is can give you the assurance you need that the arrangements made once you’ve passed on will meet your wishes.
Different Pre-Paid Funeral Plan Providers
There are plenty of pre-paid funeral plan providers on the market to choose between, whether you opt for a large national company or an independent funeral director. But one of the most important factors to consider is whether your provider is regulated by the FCA. The FCA regulates providers of funeral plans so you can trust that plans with an FCA registered provider have been subject to independent scrutiny focused on customers’ interests. The FCA will also help with any future dispute or complaint.
It is not the role of the FCA to recommend a funeral plan to customers or indeed recommend any particular plan provider, other than to highlight the importance of FCA registration. However, we do think it is helpful to explore some of the potential pros and cons of pre-paid funeral plans.
Pros of Pre-Paid Funeral Plans
- Peace of Mind
The first benefit of a pre-paid funeral plan is peace of mind. The death of a loved one is incredibly stressful and upsetting, so knowing that at least some of the financial burden and planning are taken care of reduces some of this distress. Individuals who choose a pre-paid funeral plan can rest assured that their family won’t have to deal with all the stress and logistical challenges of organising a funeral and raising the funds, all while grieving a huge loss.
- Prepaid and Preplanned
Another benefit is that you can ensure that you’ll have the funds, either fully or partially, in place to pay for the send-off you want. You can make arrangements and choose specific details that may otherwise be missed, so you can be sure that your funeral will go ahead as you imagined. This also ensures that the scope for family and friends debating your wishes is significantly reduced.
- Avoid Rising Costs of Funerals
In choosing a pre-paid funeral plan, you could avoid the rising costs of funerals by essentially fixing your funds in place to pay for the funeral you want at the current price of the plan. This removes a substantial part of the risk of your family being unable to give you the funeral you wish because of financial constraints. Fixing your funds with a pre-paid funeral plan alleviates this worry and addresses the risk of inflation.
- Tailored to Suit Your Budget
Most pre-paid funeral plans can be tailored to suit your budget and many have flexible payment plans. This is a big pro because it means this kind of plan can be designed to suit your requirements and financial position.
- Funeral Plan Regulation
Funeral plans are regulated by the FCA. Regulation is a very positive aspect of prepaid funeral plans because it ensures your funeral plan provider has undergone the scrutiny it needs to to be tasked with such an important responsibility. If you are buying a pre-paid funeral plan make sure the company is a registered provider with the FCA.
Cons of Pre-Paid Funeral Plans?
There are some potential cons of pre-paid funeral plans to consider.
- There is a Cost
Firstly, pre-paid funeral plans are not free. You need to find the funds in advance of your death, either as a lump sum or as regular payments, and this may be a burden for some.
- Not All Costs are Covered
It’s also important to remember that not all costs are covered. Most plans don’t include every aspect of a funeral, such as the church service or a wake, for example. So, whilst a cost-effective option, your relatives may still need to pay something towards the funeral for items not covered by the plan. This is a key reason to ensure you know what is and is not covered and can communicate this to those who may be arranging matters after your death.
- Some Plans Have Rules About Moving House
If you envisage moving to a different part of the country you should ensure that the plan you are buying will not be affected by this. You must ensure that the conditions and any potential costs to your plan, due to moving house, are clear to you. Different plans have different approaches. If you’re going overseas it’s very important to speak to your provider before making any plans, as some plans will no longer cover you if you move abroad.
- Not Suitable for People Close to Dying
A big con of pre-paid funeral plans is that they’re not suitable for someone who could die imminently. If you believe your death is imminent then you should take care in ensuring any pre-paid plan is providing you with genuine value over the alternative of paying for the funeral when the time comes.
- The Funds are Not Accessible Until Death
It may seem obvious but paying into a plan does mean the funds are tied up and you cannot access them. For most people, this is expected and part of the whole point but it is something to be aware of when planning expenditure and future outgoings.
Conclusion Regarding Pros and Cons Of Pre-Paid Funeral Plans
A pre-paid funeral plan allows you to spread the cost of your funeral, so the majority of the fees are paid for in advance to protect your loved ones from the financial burden. It also allows you to specify what you want for your funeral. With an FCA-regulated provider, you can be sure that they are subject to independent scrutiny on an ongoing basis. There are many pros and cons of pre-paid funeral plans, but our recommendation is to ensure you fully understand any plan you consider and ensure that it meets your needs.