pre-paid funerla plan

Insurance Policy v Pre-Paid Funeral Plan

There are many different types of insurance policies available in the marketplace. Not all of these are designed to pay for your funeral after you have died. Most are arranged to provide your family with a source of income when yours is no longer available, most likely after you’ve died. There are specific insurance policies that are designed to pay out a certain lump sum of money to pay towards your funeral. They do not guarantee to cover the cost of your funeral, but they pay-out the specific amount that is guaranteed from the day you arranged the policy. When inflation increases the cost of funerals, you might be faced with a funeral that costs more than your insurance policy is designed to pay out. One of the disadvantages of purchasing an insurance policy to cover your funeral expenses is that you might end up spending more in monthly premiums than the cost of the funeral, if you live longer than you expected. An insurance policy will work to your financial advantage if you die early in the life of the policy because your claim will be for more than you have paid in. A Pre-Paid Funeral Plan provides certain guarantees that an insurance policy lacks. Related articles Funeral Plan Insurance...

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How to Guard Against Future Funeral Cost Increases

Where you had paid for an average funeral in 1990, the cost will have been around £850. By 2025, the average funeral expenses are expected to set you back around £2,700, plus expenses. If you had purchased a Pre-Paid Funeral Plan back in 1990, you would have saved around £1,850, if the plan was used in 2005. That is a better yield on your money than an investment in a building society savings fund, over the same period of years. The inflation rate for funerals has tended to run at a much higher rate than general retail price inflation for many years. To try and save against the effects of inflation, you can purchase a Pre-Paid Funeral Plan. This means that the price you pay today, guarantees that you will pay no more for all the funeral director’s activities involved in the funeral and service. However, you should note that an amount of what you pay now, is set aside and will rise in value with the value of the funeral trust fund and is used towards the items that you cannot guarantee the cost of;- the cost of your cremation or burial; your doctor’s fees and that of your clergy. In their Cost of Dying report for 2013, Sun Life Direct has quoted funeral costs increasing 80% since 2004. They state that the average cost of dying is now £7,622. A basic funeral has risen 5.3% since last year to a current total of £3,456, which is 80% more than 2004. Once you add other discretionary expenses such as flowers and a headstone, the average cost of this funeral increases to £7,622, which is an increase of 7.1% over 2012. These figures show why it’s sensible to purchase a Pre-Paid Funeral Plan today, but it’s best to avoid insurance based plans. They have several disadvantages. Principally they don’t guarantee to cover funeral costs or allow you to specify the arrangements. Even if you are in reasonable health, you may well end up paying much more in premiums than the insurance company will ever pay out.   Related articles Not All Pre-Paid Funeral Plans Are The Same...

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