Funeral Plan vs Funeral Insurance
Funeral plans and funeral cover insurance are two different ways of paying for part of a funeral in advance. So, when you die, your family will have less financial responsibility. We explain them and alternatives you can consider. Funeral insurance cover UK policies are also known as ‘over 50s plans’. Here are some things to bear in mind if you’re thinking of taking one out.
Why Use a Funeral Plan?
The cost of a funeral depends very much on the choices you make. They can be incredibly elaborate which would cost potentially thousands of pounds or minimalistic which would be a fraction of the cost.
However you plan to do it, many people worry that when they die, they won’t leave enough money for their funeral, burdening their loved ones with the cost
With a funeral plan, you arrange and pay for it in advance, so your relatives don’t have to cover all the costs themselves.
You can arrange a funeral plan for your own funeral or for someone else’s, as long as the funeral will be held in the UK.
But a pre-paid funeral plan is not the only way to pay for a funeral.
What is funeral insurance?
Many people will be used to insuring their home, car, or other valuables, and funeral insurance is fairly similar, with a few key differences. You pay a premium, usually a monthly figure, that goes towards a lump sum that is paid out upon death. This lump sum varies depending on which funeral insurance plan you opt for and isn’t necessarily just for funeral costs. It can be used for pretty much any costs, such as settling bills or even debts but is primarily designed to pay for the funeral. Unless stated, the death doesn’t need to be unexpected or accidental and the figure will be paid out regardless of what happens.
Funeral insurance cover can be something of a gamble – the fixed lump sum that paid out by the funeral insurance company, once the person has died doesn’t grow if more payments are made, so if the person ends up living longer than anticipated, or the funeral cover insurance UK plan is taken out earlier in their life, they may end up paying much more into the policy than the amount that is paid out once the person has died.
The other big disadvantage of funeral insurance is the fact that a funeral will still need to be arranged once the lump sum has been paid, so family members or friends will be adding another job to the list during what can be a very difficult time so in the end the funeral insurance costs.
At Golden Sun we will only advise on the best options for you and your loved ones so you can be sure of great peace of mind. You can spread the costs over a period of time and will even cover the whole plan if should pass after a year of monthly payments which is a promise, ask our advisor for more details.