Date: 08 September 2017
15 September 2017 (64 days ago)
Pre-paid Funeral Plans: Simple Recently, there has been a lot of publicity in the national press about pre-paid funeral plans. This was caused by a report into the pre-paid funeral market, released by a consumer group called Fairer Finance Freeman Brothers has received a lot of queries about this report and about pre-payment plans generally and so thought it might be useful to answer some of the questions we have had. What is a pre-paid funeral plan? It is exactly what it says. You arrange your funeral and pay for it in advance, so it is set up and ready for when you die Depending on the plan, it either then provides an agreed sum towards the funeral arrangements you have specified, or pays for your chosen funeral in full. What is the difference between a pre-payment plan and an insurance policy? An insurance policy is usually something you make payments into regularly in order to receive a lump sum back upon death. A pre-payment plan does not require ongoing contributions once the agreed amount has been paid. Also, you do not receive money when the death takes place, instead the funeral is carried out as you have specified. What about an 'over 50 plan'? An 'over 50, or 'whole life' plan has more in common with an insurance policy. These are often attractive as you are often only paying a small sum of money every month. However, they are based upon receiving a fixed amount of money back at the time of death, and this may decrease in value over time in light of inflation. You often also have to pay every month until such time as you die, meaning you may pay back more than you will ever receive and, if you need to stop paying, you may lose everything. What are the problems with pre-payment plans? There are no real problems with the idea of paying for a funeral in advance. However, research has shown that some people take plans out without really understanding what they will and won't cover. Plans are structured in many different ways and it is important to understand what is and is not covered by any plan. What types of plans are there? There are two parts to the cost you pay for any funeral- including a funeral which you pay for in advance. The first is the funeral director's charges and the second is what are known as 'disbursements The Freeman Brothers team are happy to answer your queries.