Funeral cover

With so many everyday expenses to think about, the cost of a funeral is something that can often get overlooked.

Afterall, why would you want to think about your own mortality?

With the cost of a funeral now at £4,285 (according to SunLife), it’s important to think about how you'd pay for your your send-off.

No one wants to leave their family with a bill that costs the earth, but how can you protect them?

What is funeral cover?

Funeral cover is a policy which helps to cover the cost of your funeral when you die. The most common policy types are:

Funeral plan

A prepaid funeral plan allows you to plan and pay for your funeral in advance.

Acceptance is guaranteed and you don’t need to provide any medical information.

• The price you pay for your services is based on their cost at the time you take out a plan so you’re protected from future price increases
• Most essential services will be covered in the plan, exactly what’s covered will depend on the plan you choose
• You can pay for a plan upfront in one payment or spread the cost over monthly instalments
• When you die your plan is passed to a funeral director to carry out your wishes

Funeral insurance

Funeral insurance is a life insurance policy that’s taken out specifically to cover funeral costs.

Most commonly an over 50s plan is taken out as acceptance is guaranteed (to those aged 50 – 85), with no medical questions asked, and cover lasts for life.

• When you die, a lump sum payment is made to your loved ones which can help to cover the services needed for your funeral
• If any money is left over after your funeral is paid for, loved ones can use this as they wish
• You’ll pay monthly for your policy, either until you die or until you research a certain age (such as 90)

Taking out a funeral cover policy can help to give you peace of mind that your funeral is taken care of and your loved ones aren’t left with an expensive bill.  

How does funeral cover work?

Funeral cover pays for your funeral services, such as:

• Funeral director fees
• Contribution towards cremation or burial fees
• A coffin
• A hearse

Exactly how your policy works depends on the type of policy you buy.

For example, a funeral plan works by allowing you to plan and pay for your funeral services in advance.

You’ll decide on a plan which meets your needs (exactly what’s covered can vary depending on the plan you take out).

You can pay for your plan in one lump sum payment or in monthly instalments. Some instalment options could incur interest if paying over a long period.

When you die, your plan will be passed over to the funeral director listed in your plan to carry out your funeral.

Funeral insurance is slightly different. This type of cover gives your loved ones a lump sum payment after you die.

Your loved ones can use the lump sum to cover the cost of your funeral.

A funeral insurance policy is most commonly an over 50s life insurance policy so your cover will last for life.

Should I get life insurance or a funeral plan?

You might wonder which option is better to protect funeral costs for your loved ones. The truth is that it’s all down to your own personal circumstances.

If you’d like to plan your funeral in advance so you know you’re getting the send-off you want, a funeral plan can help with this.

Whereas if you just want to leave a sum of money to cover the cost of your funeral, funeral insurance could be more suitable.

It’s also important to consider what your budget is.

With a funeral plan, you’ll need to pay for the plan up front (which could be a payment of £1,700 - £5,000) or in monthly instalments. You could end up incurring interest if you spread the cost over a long time.

With funeral insurance (or life insurance) you’ll pay for your policy in monthly payments known as ‘premiums’.

Most over 50s plans on the market start from £5 per month and could provide your loved ones with a maximum pay out of £10,000 - £20,000 (depending on the insurer).

Doing your research or speaking to experts can help you to find out about your options to help you find the right one for you.

What are the best prepaid funeral plans in the UK?

We’re not able to help you compare funeral plans at Confused.com, but here is a list of plans rated 4 or 5 stars by Fairer Finance.

Fairer Finance ratings are based on the features a policy offers. To be rated 5 stars, the plan must:

• Guaranteed disbursement costs (cremation fees, interment fees and ministers fees) or offer at least £1,200 worth of cover for a cremation and £1,400 for burials
• Cover funeral director fees
• Include a hearse, at least 4 pallbearers and a coffin of at least wood veneer quality
• Be able to collect the deceased 24 hours a day
• Include transportation of the body to the funeral home (up to 25 miles free)
• Allow family and friends to visit the body at the chapel of rest anytime (by appointment)
• Allow the funeral to occur any time during normal working hours on a normal weekday
• Allow the customer to change the allocated funeral director
• Allow customers at least 30 days to cancel without a cancellation fee
• Have cancellation fees less than £250
• Be from a provider which has a 24 hour contact phone line
• Cover the cost of the funeral is the customer dies before completing all payment instalments (after 12 months of payments)
• Not include any expire clause

How much is a funeral plan?

The price of a funeral plan is usually between £1,700 - £4,500.

The exact price you pay will depend on who you buy a plan with and the type of plan you choose.

The table below shows example pricing from some of the UK’s most popular plan providers.

The cheapest funeral plan through all insurers is a funeral without service or ‘direct cremation’.

It’s a funeral that takes place without a funeral service or ceremony, allowing you to save money on these costs.

With most funeral plan providers, the price of your plan could be increased if choosing to pay through monthly instalments over a long period.

How can I buy a funeral plan?

In 2022, the FCA (Financial Conduct Authority) began regulating the sale of pre-paid funeral plans.

In order to buy a funeral plan, you must buy one through a regulated provider.

You can check the FCA’s Financial Services Register to check whether a provider is authorised to sell funeral plans. 

What's the cost of funeral insurance?

When buying over 50s life insurance as funeral insurance, most policies start from £5 per month.

We’ve looked at over 50s plans from a range of insurers, see our findings in the table below:

Unlike with other types of life insurance, you won’t need to give any medical details or be asked to take a medical exam.

The price you pay for a policy is simply worked out based on your age and how much cover you’d like to buy. Some insurers may also consider whether you’re a smoker.

Does life insurance cover funeral costs?

Yes, you can use life insurance to cover funeral costs.

A life insurance policy provides your family with a lump sum payment upon your death.

The payout is commonly used to cover living costs and funeral costs.

Funeral insurance is actually a form of life insurance. it’s just a life insurance policy that’s bought specifically to cover funeral costs.

Top Tips for funeral planning in the UK

It might not be nice to think about your funeral, but planning ahead and letting loved ones know about your final wishes can be a big help.

You could start thinking about:

• Would you like a burial or cremation?
• If you’d like a cremation funeral, would you like your ashes to be scattered (and if so, do you have a special place in mind) or kept with a loved one?
• What type of coffin would you want?
• If you want to be buried, where would you like to be buried and what type of burial plot would you want (cemetery, woodland etc)
• What sort of service would you want (religious, humanist, no service just cremation)?
• Who would you want to attend your funeral?
• What songs, poems, hymns, readings would you like during your service?
• Do you want flowers or donations for a charity?

Once you’ve got an idea of the type of funeral you’d like, it’s important to think about how it would be paid for.

• Have you set savings aside?
• Do you have a life insurance policy?
• Do you have a funeral plan?
• If you’re receiving government benefits, have you looked into what state help is available?

Putting protection in place is a great way of planning ahead and it can make things a lot easier for your loved ones.

Lastly, when buying financial protection, make sure to fully read the terms and conditions of your policy. That way know exactly what’s covered and there are no surprises when the time comes.

  

[1] https://www.coop.co.uk/funeralcare/funeral-plans/compare-our-plans

[2]https://www.goldencharter.co.uk/funeral-plans/

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