Funeral plans: Do I need a funeral plan?

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Funeral plans will cover some of the basic costs but you may need to pay for extra items

A funeral plan is one way of ensuring your family doesn’t have to shell out thousands of pounds after you’re gone. But do you need to buy one? And what are the alternatives?

Could I save for my funeral without having a plan?

A funeral plan is not the only way to meet the costs of a funeral – a life insurance policy, money from your estate and traditional savings accounts could all be possible solutions.

Over-50s life insurance

An over-50s insurance plan pays out a fixed lump sum to your family when you die, but these plans do have some drawbacks. The payout does not increase with inflation, meaning that you could end paying more in premiums than you can claim.

For example, buying a £10-a-month policy with Aviva at age 50 would pay out £3,347 but, by the age of 77, you would have already have paid this much in premiums.

However, the product is offered without medical screening, making it potentially useful for those who can’t afford standard life insurance because of medical conditions.

Savings accounts

A savings account has the advantage of growing your money with interest. However, the rising cost of funerals would mean that you may not earn enough interest to keep up with the surge. According to life and pensions specialist Royal London, the average cost of a funeral increased by 4% in 2015 and stands at around £3,700.

To make sure that relatives can access the savings after your death, set the account up in a joint name with a trusted family member.

Paying from your estate

Funeral costs can also be paid from your estate after you die. Banks will normally release funds if they’re presented with an itemised bill from a funeral director and a copy of the death certificate.

I still want to buy a funeral plan. How do I do it?

If funeral plans are for you, following our tips will help you make sure you get the right one to suit your needs.

1. Consider how your family would cope financially when you die

Funeral plans are designed to help meet the cost of the funeral when you’re gone, so think carefully about your family’s finances. If your estate could cover the cost of a funeral, even with the likely increases, or your family has the money, a basic plan – or even no plan at all – might be the best option. 

2. Find a number of policies quickly by using a comparison site

A comparison site is a good way of taking the legwork out of finding a number of suitable plans. Over 50s Choices, for example, compares many of the big providers, so is a good starting point. Remember, however, that funeral plans can be complex so you should examine the policy carefully and phone the provider if you are unsure about any of the details.

3. Check out our cost breakdown for funeral-plan providers

Funeral plans can differ wildly, so check out the costs of funeral plans for a breakdown of what is covered by the major providers. Our table only lists provider that are members of the Funeral Planning Authority. Each of our providers in our table cover the cost of a hearse, care of the body and arrangement and supervision of the event by a funeral director.

Find out more: The costs of funeral plans

4.  Pay for your policy as quickly as you can

Like many other financial products, such as car and home insurance, funeral plan providers give you the option of paying either in instalments or in a lump sum. Most providers give you the option to pay over 12 months to 120 months. Paying in instalments for a long time will cost more because of administration fees and interest. While 12 monthly payments may cost roughly the same, paying over 60 months, for example, can add around 15%-26% to the overall cost.

5. Read your documents carefully

While funeral plans cover much of the cost of funerals, there are many items that are exclude, such as headstones and burial plots. Some costs are also capped, such as burial and cremation costs. Read the documents carefully to make sure you understand the plan fully – as well as its limitations – before you buy.

Last updated:

April 2016

Updated by:

Leigh Jackson

Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.