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Pros and Cons of Prepaid Funeral Plans

Planning funerals are not a hot topic within families, but they will need to get discussed if they want to avoid a financial burden. Prepaid funeral plans get prominence as a way to secure a funeral with a payment plan, reasonable costs, and arrangements for wishes and services.

However, there may be scenarios where a funeral plan may not suit your circumstances. This guide will investigate the pros and cons of a funeral plan, helping you decide whether it’s a good investment or not.

Do I Need a Funeral Plan?

Arguably, a funeral plan is one of the most straightforward and affordable ways to pay for your funeral. There have been significant increases in the cost of funerals over the last 14-years in the UK, where trends don’t see the expenses falling anytime soon.

The rising costs year after year lead many older people to consider a funeral plan to have the farewell service they want. It also protects their loved ones against paying for an expensive funeral. Investing in a funeral plan may seem reasonable, but offerings vary between providers.

Some of the intricacies of arranging a funeral plan may cover everything you want in a service. And while there is usually a range of funeral plans to suit your budget, it might not be financially feasible in the long term.

That leaves the question of whether you think you need a funeral plan. So how do you weigh whether investing in a prepaid funeral plan is the right decision?

We can look at the pros and cons of prepaid funeral plans to discover whether it’s the best course of action for securing your desired funeral. Let’s start by looking at the advantages of funeral plans.

What are the Pros of Funeral Plans?

We compare plans from the leading funeral providers

There are many pros of prepaid funeral plans, mainly revolving around peace of mind that your funeral expenses get taken care of when you pass. These are some of the most prominent advantages of a funeral plan.

1. Protect Your Family from the Rising Costs of Funerals

The average costs of funerals have increased more than 54% between 2010 and 2022. That number has become significantly higher over the last couple of years.

These statistics showcase a trend of rising costs for funerals, almost exponentially growing over the last 14-years. There are no signals to suggest that the expense of having a funeral will fall anytime soon, but quite the opposite.

The fact that funerals have become so expensive is a concern for families. They want to give their loved ones the send-off they deserve when the time comes around but cannot make the finances work for the various arrangements to host the desired funeral.

Funeral plans offer the opportunity to lock in the funeral service you want at today’s prices. You’ll be able to make the arrangements now and get a more concise vision of what the funeral plan provider will cover and what your family will need to pay.

Some plans will take care of the full spectrum of wants and needs in many cases. Your family won’t have to pay any more money, and the funeral arrangements are already in place.

2. Funeral Plans Offer Various, Workable Payment Options

Funeral plans offer many flexible payment options to cover your funeral costs, following the topic of expenses. You can pay everything in one lump sum to secure your funeral arrangements. There are options to pay them in monthly instalments, which are usually quite reasonable.

Those on a budget can pay over time. In contrast, many funeral providers will payout for the expenses if you pass away only two years after purchase. Most providers will have various tiers of plans available with different levels of coverage, such as only funeral essentials for the lowest monthly cost and other more intricate features at higher but still reasonable instalments.

It’s worth noting that a funeral plan differs from a life insurance policy as the funeral is a fixed price. Should you choose a monthly plan, you’ll only pay in instalments what you owe.

3. Have the Farewell That Matches Your Wishes

Talking about dying is never an easy topic. Families often neglect to consider what happens after someone passes, from funeral arrangements to final wishes.

Should you pass unexpectedly, there may be confusion about the funeral service you’d like and any wishes you’d want to execute post-passing. Funeral plans often include planning teams that ensure you have a farewell that matches all your desires.

Most funeral plan providers will allow a high degree of flexibility when planning your funeral. You’ll be able to choose your director, service arrangements, flowers, donations, and other wishes commonly associated with passing.

Funeral plans heed an advantage by eliminating any uncertainty when the time comes.

4. Guaranteed Acceptance into the Plan

There’s a common misconception that funeral plans are like a life insurance policy where you need to answer health and lifestyle questions. That is not the case with funeral plans – there are no interrogations, reviews, or any gruelling application procedures.

Acceptance into a funeral plan is guaranteed if you are a UK resident. Funeral plans are a reasonable alternative to health or life insurance, where policies are too expensive due to underlying health conditions or current ailments. You won’t have to disclose any medical issues or inform of any aspect of your lifestyle.

The only restrictions behind funeral plans are that many providers will have age limits. Some will allow the purchase from 18 years old with no upper age limit, whereas most will restrict purchases between 50 and 80.

Besides that, there are rarely any roadblocks to purchasing a funeral plan.

5. Governing Bodies Regulate Plans

There’s a profound sense of security for your funeral when investing in a plan, mainly because the Funeral Planning Authority regulates all UK providers. The rules dictate that every provider must put all their funds into a life insurance policy or trust fund. Even if something happens to your provider, your payments are secure.

On the rare occasion your funeral plan provider would not be able to pay out for your funeral, you can rest assured that you get compensated.

What are the Cons of Funeral Plans?

Naturally, some aspects of a funeral plan may not be particularly appealing to individuals or families. It’s just as vital to highlight the disadvantages of purchasing a funeral plan as much as the advantages.

Find the cons of investing in a funeral plan below.

1. Payments to the Plan Tie into Your Funeral

We mentioned earlier that there is a misconception that a funeral plan shares similarities to a life insurance policy. It’s essential to understand that the two are not the same. The fundamental difference is that life insurance offers cash payouts upon death, and a funeral plan only pays for funerals.

Most funeral plan providers will discuss and outline your funeral service wishes when you sign up for the plan. When you pass, the funds for the funeral will often go straight to the director rather than to the family or estate.

Should the family consider any changes or cancellations, the already existing plan cannot be refunded or exchanged for cash. The funeral organisation will have to proceed as planned.

However, some providers offer flexibility in allowing changes or cancellations, with instances facilitating a refund of money to the estate. But investing in a funeral plan means securing your funeral in advance, so the provider will only put funds towards that purpose.

2. There May Be Unforeseen Expenses Not Covered by the Plan

The different tiers of plans providers make funerals affordable for those who would otherwise not be able to pay for upfront costs. However, it’s critical to thoroughly understand these various plans, considering that the cheapest option may not always cover your wishes.

The most affordable packages with funeral plan providers will usually cover the funeral essentials, including director’s fees, transport and care for the deceased, and a service. They will not include other third party costs, which will be up to the family to pay.

Those costs commonly include:

  • Burial plots and cremation fees

  • Doctor’s fees

  • Minister’s fees

Many will take out funeral plans, not understanding that these costs are essential to the service, leaving families to pay after passing. Some plans cover these costs, so if you believe your family cannot afford any unforeseen expenses, ensure you purchase the more comprehensive plan.

3. Not Suited for Those Expected to Pass Soon

If you have a condition or are of an age where there’s an expectation of passing away in a relatively short period, investing in a funeral plan may not be of any value.

Funeral plans will protect families from rising costs and provide arrangements at today’s rate. However, the ultimate cost of a funeral plan may be more expensive than paying the upfront expenses.

If your estate or your family can take care of the funeral and following costs, a plan would not be helpful, especially in monthly instalments. Most providers will not cover funeral expenses until at least two years of payments, so passing earlier may leave your family in limbo.

The purpose of the purchase is to ensure affordable costs and seamless arrangements for a future funeral. If there’s an expectation of passing on soon, the advantages of a funeral plan would be redundant.

4. Dying Abroad Can Be Challenging

One of the most significant disadvantages of funeral plans is that they will not cover the cost of repatriation should you pass away abroad. That means if you decide to live overseas or you unexpectedly die on holiday, the prices of getting your body back home would be extra and possibly high.

Some funeral plan providers may cover repatriation costs if you pass abroad, though most will not offer that feature. Usually, travel insurance is the policy that will cover transport back home if you pass away in a different country.

Therefore, funeral plans can be thrown into complications if you emigrate or pass on holiday. Once your body is home, all the arrangements will execute as planned. However, there’s just the challenge of getting back first.

5. It’s Possible that Funeral Costs May Fall

We can use past trends and statistics to analyse what we think will happen with funeral costs. The last 14-years have shown that funeral expenses are only increasing, but we can’t predict the future.

There may be some innovations, technology, or other market factors that could drive down the costs of funerals in the future. If you purchase your plan now and prices fall, you may significantly overpay for your funeral.

Though there is the possibility that prices may come down, funeral plans at the very least cover expenses and arrangements in a time of distress and emotion for the family.

Weighing Up the Pros and Cons of Prepaid Funeral Plans

Analysing prepaid funeral plans’ pros and cons leave prospective buyers with some takeaways. Weighing up each helps define whom a funeral plan is best suited for and if it’s worth an investment.

The key takeaways from the pros and cons include:

  • Funeral plans are worthwhile if you have the money to pay in instalments or upfront.
  • They will protect your family from stress and unexpected costs when you pass away.
  • Funeral plans elude the risk of rising funeral costs.
  • You can get control of your funeral arrangements and wishes.
  • Not ideal if you may pass in the short-term or live abroad

So do the pros outweigh the cons? Only if there’s concern about the cost and arrangements of your funeral farther down the line.

How Do I Receive a Quote for a Funeral Plan?

Everyone has their unique circumstances and needs when thinking about funerals. Should you consider investing in a funeral plan to get peace of mind when passing, you can get an understanding of cost and coverage in a quote.

Fill out a few details in the form below, and you’ll get a quote to give you a clear idea of whether a funeral plan is right for you.