Funeral plans offer better value than guaranteed life insurance or regular savings

The last thing anyone needs at the time of a bereavement is the financial strain of paying for a funeral. Planning ahead to make sure your family isn’t faced with unexpected funeral expenses will bring you peace of mind, but what is the best way to make sure your funeral is paid for?

There are three popular ways to plan ahead for funeral expenses:

  • A dedicated funeral plan
  • Guaranteed over 50s life insurance
  • A regular savings account

Guarding against price rises

Taking out over 50s life cover provides a fixed lump sum on your death; regular savings or an ISA will also accumulate a lump sum over time.

The problem with these approaches to covering future funeral expenses is that the fixed amount paid out or saved may not be enough to cover the entire cost of your funeral. With the average cost of a basic funeral rising at almost 5% in 2018, neither guaranteed insurance policies nor savings are likely to keep pace with funeral-price inflation.

Insurance provider SunLife has been tracking funeral pricing for almost 15 years; over that period the average cost of a basic funeral has jumped 122%. Assuming historic rates of increase continue, forecasts from Golden Charter show the average costs of a basic funeral will rise from £4,271 this year to £7,579 in 2028 and £13,449 in 2038.

The only sure way to guarantee that your funeral provisions will meet your future funeral expenses, is a funeral plan that fixes the cost of the funeral director’s services covered by your plan at today’s prices.

Getting what you pay for

By paying monthly into a guaranteed life insurance policy it is possible to pay more in insurance premiums than the final payout is worth. The younger you are when you take out the insurance and the longer you live, the more likely it is that you will pay in more than you get out.

With a Golden Charter funeral plan, the funeral director services that you are paying for are specified in advance. No matter how prices change into the future, you will get the services you selected at no extra cost.

There is also a contribution set aside to offset the cost of third-party fees; the value of this third-party cost allowance grow over time and only if third-party costs were to increase by more than the growth of your plan could there be more to pay at the time of the funeral.

Knowing what you paid for

Making provision for your funeral costs through a guaranteed over 50s insurance policy or regular savings may help cover the cost of your funeral. However, there is no association between the money accumulated and your funeral service.

With a Golden Charter funeral plan you can make your wishes clear in advance, meaning your family will know exactly what you want when the time comes. Planning ahead gives them not only protection from unexpected funeral costs, but also from having to make difficult decisions about your final wishes.

While it won’t take away the pain of loss, a pre-paid funeral plan is the best way to guarantee that your family doesn’t have to cover shortfalls left when savings or an insurance policy fail to cover the cost of your funeral. You and your loved ones will have the reassurance that your funeral director’s costs are covered, your family will know which funeral director you have chosen and there will be a clear record of any special requests you have made.

Golden Charter offers a choice of plans across a range of budgets with a variety of payment options. We also have one of the largest network of independent funeral directors in the UK, many long-standing, family-run businesses. Find out more about how you can plan for your funeral with one of the funeral directors in our network. Request a free, no obligation information pack below or call 0800 111 4514.