Pre-Paid Funeral Plans
One thing that people often forget to consider when a loved one passes, is the immense costs that can come with a funeral. This can surprise you at a time when you are grieving and missing someone you love. This is where pre-paid funeral plans come into the picture. These plans allow you to pay for funeral costs inn advance of a funeral happening. This works perfectly is a family member becomes terminally ill or if you have an aged relative. If you are concerned about the cost, a plan such as this will allow you to pay in instalments. However, if there is a point at which you have your finances in order, you can pay in a lump sum too. Let’s get more specific about the important features and benefits that are on offer.
Here are some of the benefits:
- Prices will be frozen at the point of agreement to the plan
- Can pay in daily/weekly/monthly instalments to spread the cost, or in a lump sum is desired.
- Stops you being burdened with a sudden difficult-to-pay bill.
- Useful if a loved one does not expect to be given much time.
- Gives you peace of mind to remember your loved ones instead of worrying about money.
- Around 20% of funerals in the UK are now under a pre-paid plan.
- The average cost of a basic funeral is about £4,000.
- Paying in instalments can be up to as much as 10 years in advance!
Are they better than the traditional method?
As described, probably the biggest benefit of these advanced plans is to stop families from being over-burdened at a time where they are grieving. It should also be noted that there are now many of these plans around under different providers, and what each plan offers varies. Some of the plans do not cover the cost of, say, a cremation. Others will have a defined contribution that they offer to various parts of the process, such as the burial. Be careful and make sure that you’re not left having to make up the cost of something you expected to be part of the package.
The industry as a whole is not strictly regulated by the Financial Conduct Authority (FCA), although there are still plenty of rules in place to protect your investments. In particular you have Section 75 of the Consumer Credit Act 1974, which protects investments or purchases of over £100 in case the company offering goes bust, especially relevant at this current time.
It’s worth noting, too, that there are alternatives, primarily insurance policies. Various policies would help you be able to handily cope with the cost of a funeral. The biggest difference with insurance is the added uncertainty about whether you are due a payout, which goes off the terms of the policy. With a funeral plan, you know you are guaranteed to be safe, or that your money is protected if anything happens.
What else should I know?
Pre-paid funeral plans are still a relatively new idea. They often come with a money back guarantee in case they are not needed. As you may expect, the longer the ter of payment, the higher the overall value you will have to pay. This will sit at somewhere between 15 and 25% higher a value.
They are best served to reduce stress, hurt and financial burdens in a time when these will already be at their limit. It is a modern solution to the difficulties of our modern times.