As the cost of funerals continues to rise, more of us are thinking about how to finance our own funeral so our family and friends will not have to. Whether it be through a funeral plan, a savings plan, or life insurance, it is comforting to know that your funeral is paid for in advance and tailored to your final wishes. But which is the best option for you?
Funeral Plans
A funeral plan provides a secure way of paying for your funeral and allows you to arrange your entire send-off in advance. You could also choose and buy your preferred columbarium niche to keep the cremation urn in future. This gives you – and your family – peace of mind, knowing that you will get the funeral you have chosen at a price you can afford.
A funeral plan allows you to purchase the Funeral Director’s services at today’s prices and to fix the cost of most elements of your funeral to protect against future inflation.
The cost of a funeral plan will vary depending on your exact requirements, but whichever plan you choose, there is an affordable payment option to suit your budget. You can either pay the amount in one go, or pay a fixed amount into your funeral plan each month until complete. This money is either held in a secure, independent trust fund or in a whole-of-life assurance policy, which is then used to pay your funeral costs.
Life Insurance
Life insurance is widely advertised as an alternative to a funeral plan as means of providing financial assistance to your dependents when you die. Over 50s life insurance is the most popular product, where customers pay a fixed amount each month for the rest of their lives, and their beneficiaries receive a lump sum on their passing.
Life insurance policies are often more affordable than the monthly payments for a funeral plan, but they may not always pay out enough to cover the full cost of the funeral. And because you pay a set amount each month, you could pay in more than you get out, especially if you live a long time. Furthermore, the average life insurance policy becomes more expensive the older you get.
Most families can benefit from owning a burial insurance policy, which is a form of life insurance. At the time of your death, your family receives the death benefit, which can be used to pay for funeral and final expenses. Lots of insurance providers provide policies like these. So it’s important to research the best burial insurance policies.
Savings Plans
Saving through your bank or building society in a cash ISA could also be an option. With no contractual obligation, it is attractive to many, but again it could not guarantee there will be enough funds to cover funeral expenses as a funeral plan would. It can also be difficult for your loved ones to access your ISA upon your death and could involve a lengthy process, including solicitors before funds are released.
Making the right choice
Choosing the right way to pay for your funeral is a personal choice, but as the cost of dying continues to rise, it is important to consider how your loved ones might finance your funeral otherwise.
While a dedicated savings plan or over 50s life insurance might work for some, purchasing a funeral plan is the best way to ensure not only that your funeral has been organised but also paid for in advance. Committing to a funeral plan could be the last gift you give your family.
