Shopping around for a Funeral?
It may conjur up thoughts of funeral homes, coffins and grim faced people dressed in black but with the dawn of the internet, shopping around for a funeral is easy to do, doesn’t have to involve a trip to the local Funeral Directors and could be a wise investment when it comes to saving the pennies.
With over 130,000 prepaid funeral plans and almost 300,000 over 50 life insurance policies sold in 2013, there is no denying that funeral planning is a growing business. But, given the consequences of doing nothing, it is something more of us should be taking on to ensure our finances and families are protected.
Why plan a funeral today?
With an average cost of over £3,400, dying is an expensive business and one that many families are often ill prepared for. Having risen at an alarming rate of over 7% pa for the last 9 years, costs are increasing way above the rate of inflation which unfortunately is a trend that looks set to continue.
According to the British Card Association, in 2013 the largest single item most frequently bought on a credit card was believe it or not a funeral service. Paying on credit says a lot about the nation’s attitude to funeral planning so it is little wonder that so many families face financial hardship when it comes to saying goodbye to a relative.
With almost 60% of over 50s having no plans in place, yet only 7% of them expressing concerns about funeral costs, we radically need to change the mindset of the UK and stop avoiding the inevitable subject of death and the impact it has on those around us.
So what can I do about it?
Whether you are looking to put plans in place for yourself, your partner or your parents, a prepaid funeral plan gives you the opportunity to arrange everything in advance and freeze costs at today’s prices, avoiding the impact of future inflation. When you consider the rising cost of funerals, this could be quite a saving in years to come.
The majority of prepaid funeral plans usually guarantee to cover the cost of the Funeral Director’s services and many also include an allowance for third party costs, which consists of cremation or burial fees and the Minister’s and Doctor’s charges.
If you are buying a funeral plan for your parents (this is often recommended for parents entering residential care, as it’s an allowable expense to reduce assets when being financially assessed by the local authority), you can do this on their behalf and choose to have the plan documentation sent for your attention if required.
If you are looking for a prepaid funeral plan for yourself and a partner, you can either opt for two plans or choose a joint one. A joint funeral plan is one that is in both names and covers the costs of the first person to die. Of course funds would need to be made available for the surviving partner but it is a cheaper option than buying two plans (some companies don’t charge for this service, others charge a nominal fee) and could be worthwhile if money can be freed up from the estate once both have died.
How much will it cost?
Prepaid funeral plans tend to offer three levels of service which include a simple, standard and superior plan. Prices range from between £3,000 to £4,000 with differences generally attributed to the quality of the coffin and whether any limousines are included for the family.
Some funeral plan providers also offer a more basic plan, priced at around £2,000 but these just cover the Funeral Directors fees and do not include any allowance for third party costs.
Are there any payment options available to help with budgeting?
There are a number of payment options available these days making funeral plans more affordable to a much wider audience. These include
- Single payment
- 12 to 60 monthly instalments – Most funeral plan providers do not charge any additional fees for 12 monthly instalments however administration fees will be included on longer instalment periods. These will be made clear to you up front so you can decide whether you are happy with the overall costs.
- Fixed Monthly Instalments – You pay lower monthly premiums into a life insurance plan until you die or until your 90th birthday and are fully covered after an initial period of between 6 months and 2 years (depending on the provider).
The beauty of shopping around
Let’s face it many families are reluctant to shop around when it comes to arranging a funeral, either because it is too distressing or they feel it is in some way disrespectful, so arranging everything yourself in advance is a good way to save money and only choose the services you want.
The key to getting the best deal as always is to compare funeral plans, look closely at the features, terms and conditions and of course price.
The internet is a great place to start as there are a number of comparison sites, which will help guide you through the process. You can often get deals for buying online too so it is certainly worth taking a look.
At the end of the day shopping around for a funeral will not give you the same buzz as choosing your next holiday, or buying the latest TV with all the gadgets and gizmos, but it will give you reassurance that your family are protected, which as they say in the adverts is ‘priceless’.