Funeral Plans Explained
Why the cost of a funeral in 2040 could reach £11,342
and how anyone aged 57+
can lock in a saving of £8,000
Take a moment now to discover:
✓ What’s behind the sudden upsurge, and how it affects your family
✓ The different types of funeral plan: which is right for you?
✓ 7 vital questions to ask before you sign on the dotted line
Costs are rising, sharply. An average funeral that cost £1920 in 2004 shot up to £4264 in 2018. And there’s no sign it will slow down.
Cemeteries are investing to meet the shortage of plots – at a time when Local Authority cuts threaten burial subsidies. And the same austerity measures are hiking up cremation costs, with councils slashing maintenance and upkeep in their budgets.
Add to that a rise in wages, fuel and professional fees, and you can see why – Funeral costs are rising year on year by 4.56%. (That’s twice the rate of inflation!)
It’s all there in SunLife’s 2018 Cost of Dying Report:
By 2030, an average funeral will reach £6950 – then a decade later, a staggering £11,342. So little wonder thousands are acting now to lock in today’s prices.
How will your family cope?
This may not be a comfortable exercise. But just for a moment, imagine you’re no longer here…
Naturally, it will be a stressful time for your family – and nothing can change that. But that stress could multiply when they go through your estate, and start discussing costs with a Funeral Director.
If you’ve made no provision for your funeral, they face three possible outcomes:
1 – They foot the bill themselves. (That can be a stretch. It’s not uncommon for families to pool funds, or even sell possessions, to meet the shortfall.)
2 – They take the money from your estate. (Not easy. Probate can take months, so they may need a bridging loan. And of course, it eats into your legacy.)
3 – Worst Case: it falls on the state to give you a basic send off. (Unlikely, but if it comes to that, it’s a painful and humiliating experience.)
None of this is ideal. But with a sensible funeral plan, it simply won’t be an issue. With a manageable investment now, you can take on one final duty for your family – leaving them free to grieve when the time comes, without additional stress.
How does a funeral plan work?
There are many different plans. Offering different levels of cover, and different ways of paying. But essentially, it’s about…Locking in your funeral at today’s cost – not tomorrow’s.
By paying into an investment fund that accumulates interest to make up the difference. There’s no question, it’s sound financial sense. But choosing your plan can be a daunting prospect.
… Because every plan is different.
… And you have to turn sleuth to figure out what is and isn’t included!
So here at Planning for Peace of Mind, we’ve set out to make things easier by compiling seven questions. Whoever you speak to, it’s vital to ask these and get some firm answers before you commit to a plan.
7 Questions to Ask
When Considering a Funeral Plan
“Can I choose the Funeral Director?”
Maybe you’ve already dealt with someone local? Someone who’s taken good care in the past, when you’ve said goodbye to a loved one?
If so, you’ll want them to take care of your final journey.
So ask the question: does the plan give you a free choice?
Some do. Some don’t.
Perhaps you want to deal with someone you already know and trust? There are plans that have exclusive arrangements with national chains like the Co-Op and Dignity.
These chains have a sterling reputation of course, and deservedly so. But if you’d prefer someone local, perhaps someone you know –
That restrictive clause could be a stumbling block.
Only you can decide.
“Is the plan provider FPA-registered?”
Chances are, the company setting up your plan won’t be the plan provider. Typically, there’ll be a larger company behind it, managing the fund.
That’s perfectly normal. In fact, it’s how we work. Rest Assured plans are operated by Golden Leaves – the first ever company to offer funeral plans in the UK, back in 1984.
When we set up a client’s plan, they manage the fund and make sure it pays out on death.
Most plans are managed that way. So it’s important for you to research your provider.
Look into their pedigree and reputation, to see if there’s any cause for concern.
As a minimum, make sure they’re FPA-registered.
Then you know they’ll comply with the tight regulations that govern funeral plans – Including an easy and transparent complaints process, should you be unhappy at any time.
Rest Assured chose Golden Leaves because they’re FPA registered and have a reputation
as a provider of high quality, affordable funeral plans.
As shown in a recent Which? survey that rated their plans as among the best value and most affordable in the UK.
“Can you guarantee the Funeral Director will honour the price you quote?”
It seems too good to be true, doesn’t it?
Why would a Funeral Director 20 or 30 years from now take care of your funeral at an old rate that’s fallen behind inflation – especially when costs have risen exponentially?
The answer is twofold.
Firstly, the investment plan should be structured to pay out when the time comes, at a rate that will cover their fees – with all increases factored in.
And secondly, they should be contractually bound to honour the arrangement. So they can only levy extra charges if your family request additions to the plan – like upgrading the coffin or adding another limousine.
However, that “SHOULD” is a minefield!
… A funeral plan SHOULD be structured to meet the future cost in its entirety.
… And Funeral Directors SHOULD be legally bound by contract.
But this isn’t always the case. So check the small print, or quiz the person who sets up your plan.
Make sure there are no loopholes or extras hidden away.
Rest Assured has agreed a price structure with an industry panel, so we can quickly enter into a binding contract with your chosen funeral director.
And as it’s a fully regulated plan, it transparently sets out everything that isn’t is and isn’t included…
… So you can be sure the price you’re quoted is going to be honoured.
“Who pays for disbursements?”
Does the plan make provision for third party costs – and if so, how much?
The Funeral Director’s fee pays for the coffin, transportation, personal care and funeral arrangements – usually including a place in their Chapel of Rest.
But that’s not the final cost. There are third party expenses too – known as “disbursement fees” – like the cost of a minister or officiant and the cremation or burial plot.
Will your funeral plan meet those costs?
Some will. Some won’t. If a plan doesn’t cover disbursements, that doesn’t mean it’s unsuitable. Some people opt for basic cover only, and leave their family to settle the rest.
But before you sign a contract, ask the question so you know exactly what’s covered.
Our plan provider Golden Leaves is the UK’s first Independent Funeral Plan Provider to fully GUARANTEE disbursement costs. So we can give you options.
Choose a basic plan with no disbursement cover, or a comprehensive package. You decide.
“Will I be paying for the rest of my days?”
This is a common worry. And with good reason, too.
If you’re 65 now and live another 30 years, you could be overpaying. And if you cancel payments, you’ll lose your whole investment.
So how do you cover the cost now, without tying yourself in forever?
As a rule, there are four ways to pay for funeral cover:
1: A single advance payment, where you simply write a cheque for the full amount and cover begins immediately.
2: A short term plan where you pay the full cost over, typically, 12 months. Cover usually begins once you make the final payment. If you pass away sooner, the money you’ve paid in SHOULD count towards the final cost – if you’ve taken out a good plan.
3: A mid-term plan where you pay the whole cost over 2 – 5 years. Again, full cover SHOULD begin on final payment – with partial cover sooner, based on contributions.
4: Fixed Monthly Payments, where you pay a small ongoing fee. Cover normally starts after two years. (More on that below…)
This fourth type is the only arrangement that could see you paying indefinitely. So find out:
Is there a cut-off point where they say “That’s it – you’re covered for life”?
Rest Assured offers all types of payment plan, so you can pay in advance or in stages – or pay a fixed monthly fee, if you prefer.
The Fixed Monthly Plan through Golden Leaves:
… Covers you after 12 months (a year before any other plan provider).
… Returns 120% of your premiums if you pass away during year one.
… Ends your contributions as soon as you turn 90. So your cover continues at no extra cost, for life. (Again – no-one but Golden Leaves will offer this.)
“What happens if I overpay?”
Overpayment is a legitimate concern. If costs don’t rise as expected, you could put in more than you take out. So you need to know –
What’s the risk, and how is it dealt with?
There’s a wind of change here. The industry argues, overpayment is compensation for the risk of paying out early. (In other words, “tough luck – that’s the chance you have to take!”)
But finally, there’s an alternative…
Every Rest Assured plan offers an OVERPAYMENT REBATE where up to 100% of any extra is paid back to your estate.
Yet again – no plan provider but Golden Leaves will offer this.
“Does it matter where I pass away?”
Location is important. A funeral in London, for example, costs more than a funeral in Huddersfield. So your premium will depend on where you live and where you intend your funeral to take place.
So if you move house, there is a chance it will affect your premium.
It all depends on:
• Your new location
• Whether you switch to a new Funeral Director
• Their distance from your new home
• The funeral location
Of course, you may not pass away in your local area. You could even be in another country. So what happens then?
Typically, transportation within the UK is covered by the funeral plan – in part or in full. But repatriation from overseas is met by travel insurance, with the Funeral Director’s costs met by your plan once they take delivery. That’s the norm.
With a Rest Assured plan, you can nominate countries where you want extra cover. So if you have property abroad, or you’re a
regular visitor, tell us and we’ll add it to your policy.
Then if the worst happens while you’re away, we take care of it all.
The more you ask, the safer your decision
When you ask these seven questions, you should learn a lot about the plan you’re considering. You should understand:
✓ How to set up the plan
✓ How much you’ll pay, and for how long
✓ When your cover begins
✓ Which level of cover is right for you
✓ What’s included, and whether the sum is guaranteed
✓ The Disbursements Trap: what happens with third party costs
✓ Who provides the plan, and how they operate
✓ Smallprint for overpayment and early or accidental death
✓ How to choose your Funeral Director – and if you have a free choice
✓ Plus why or how your premiums might change in the future
Let’s give you some answers now
Hopefully, you can see why a funeral plan makes perfect sense – and the false economy of putting off the inevitable.
So next, you need figures and some finer details, to match the right type of cover with the right payment terms.
Let’s discuss that.
If you’re ready to tick this off the list and get some peace of mind, there’s a Rest Assured plan to suit you. And remember – As of now, our most popular plan comes in at £3364.
You can lock in this rate and save £8000 on the projected cost of a funeral 20 years on…
… And pay in instalments, so it needn’t make a dent today.
Just click and fill in a few details here:
We’ll get in touch to discuss your wishes and give you all the information you need – without obligation.