The ins and outs of funeral plans in 2023

Funeral plans have been available for many years and are a popular way to arrange and prepay for a funeral.

While a lot of people prefer not to think about their passing, or their final send-off, taking out a funeral plan can help reduce a lot of stress and worry for loved ones when the time comes, and can provide peace of mind for all the family.

As funeral costs continue to rise in the UK and the US, along with everyday living costs, it’s now even more important to plan ahead and prepare financially for this inevitable event, even if it’s not the nicest of thoughts.

So, could a funeral plan be the right option for you? Reassured, an award-winning UK life insurance broker, explains the ins and outs of funeral plans in this helpful 2023 guide.

What is a funeral plan and how do they work?

A funeral plan allows you to plan and pay for your funeral in advance. It covers the key services required for the final farewell of your choice, whether that be a cremation or burial funeral.

For example, it can include elements such as a hearse, coffin, pallbearers and any funeral director services provided by a local nominated funeral director.

Funeral plan providers, such as Avalon and Golden Leaves, offer several different funeral plan options as well as different payment options.

You can usually choose to pay in full or by monthly instalments. Your money is kept secure in an independent trust fund or life insurance policy.

When you pass away, your loved ones would need to contact your provider and the funds are released to pay for your funeral.

The nominated funeral director will then carry out all the arrangements which are outlined in your plan, exactly as you requested.

How much is a funeral plan?

It’s difficult to say exactly how much a funeral plan is because they vary so much in price depending on what’s included in the plan and the company it’s provided by.

Other factors which also affect the cost of your chosen funeral plan include your age and the payment term.

Generally, prices range from around £2,000 for an affordable direct cremation, all the way up to £4,500 for the most expensive funeral.

How much does a funeral cost?

In 2021, the average cost of a cremation funeral was £3,765 and the average cost of a burial funeral was £4,927[1].

Although, the actual cost of a final send-off can be more depending on the location, which services are included, and if there’re additional elements such as flowers and a wake.

Many people worry about how their loved ones will afford to cover this large expense, particularly at short notice.

A funeral plan can bring you and your family peace of mind that most of the costs have been taken care of ahead of time and with minimal fuss.

Compare prepaid funeral plans

When looking for the right funeral plan, it’s helpful to compare the options available.

This is because each plan comes with different benefits and features. Also, as mentioned above, prices vary depending on what’s included in the plan and the provider.

The table below compares the key features of funeral plans offered by some of the UK’s biggest providers:

	Avalon	Co-op	Golden Charter	Golden Leaves
Guaranteed acceptance (no medical questions)	Yes, if aged over 18	Yes, if aged over 18	Yes, age restrictions apply with some payment plans	Yes, any age
Guarantees to cover your chosen funeral services (if paying by monthly payments)	Yes, after one year	Yes, after one year	No, if you pass away before finishing your payments then the shortfall will need to be paid by your estate or family	No, if you pass away before finishing your payments then the shortfall will need to be paid by your estate or family
Accidental death cover if paying by monthly instalments	ü Immediate cover	ü Immediate cover	X	X
For cremation, are crematorium fees covered in full or is there a contribution towards these?	ü Covered in full or contribution provided, depending on the plan	ü Covered in full or contribution provided, depending on the plan	ü Contribution of £1,100	ü Covered in full or contribution provided, depending on the plan
For burial, are cemetery fees covered in full or is there a contribution towards these?	ü Contribution provided, depending on the plan	ü Covered in full or contribution provided, depending on the plan	ü Contribution of £1,100	ü Contribution provided, depending on the plan

Joint funeral plans

Joint funeral plans are available with some providers and allow two people (such as a married couple) to be named on a single plan.

A joint plan will only cover one funeral, for example, the funeral of the first person who passes away.

This means the surviving partner would need to arrange a new funeral plan to cover their own funeral.

Are funeral plans safe?
Yes, prepaid funeral plans are safe to purchase if the plan provider is registered and authorised by the Financial Conduct Authority (FCA).

The FCA stepped in to regulate the funeral plan market in July 2022 to protect customers and their money.

When buying a funeral plan, you can have peace of mind that you’ll receive the funeral you paid for, even if the plan provider goes out of business.

What’s not included in a funeral plan?

There are some services and elements that a prepaid funeral plan won’t cover as standard.

These include:

Flowers
Embalming
Alternative hearses
Funeral notices
Extra limousines or executive cars
Burial plot
Catering/wake
Memorial
Live music

Is a funeral plan better than life insurance?

Funeral plans are a popular way to cover funeral costs ahead of time, but there’s also the option of a life insurance policy to cover funeral costs, such as an over 50s plan.

An over 50s plan provides a guaranteed cash pay out to your loved ones when you pass away. They can use the money to help pay your funeral bill or they may choose to spend it elsewhere.

The cost of this type of life insurance is based on your age and the level of cover you want to take out. Sometimes you’re restricted by how much you can secure because of your age.

This means you may not be able to secure enough to cover for your whole funeral. However, the monthly cost of an over 50s plan tends to be cheaper than a funeral plan.

If your budget allows, you could have both forms of protection in place simultaneously; a funeral plan to ensure your funeral is organised and paid for in advance, and a life insurance policy which provides a cash sum pay out.

The important thing is to ensure that you find the right product at the right price by shopping around and comparing quotes.

[1] https://www.sunlife.co.uk/siteassets/documents/cost-of-dying/cost-of-dying-report.pdf/