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Guide to funeral plans

Last updated 25th March 2020

This article explains how funeral plans work and will help you consider their pros and cons and what alternatives are available. Please bear mind it is not financial or legal advice.

What is a funeral plan?

Funeral plans allow you to arrange and pay for your funeral in advance, with either a lump sum, in instalments, or with monthly payments. Having a pre-paid funeral helps reduce the stress and financial strain on your loved ones and can lock in the cost at today’s price.

A pre-paid funeral plan can be organised directly with a funeral director or a plan provider. You can decide on a specific type of funeral and can sometimes pick what extras you’d like for your funeral, such as the type of service or coffin.

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How do funeral plans work?

A funeral plan is a policy that covers the cost of chosen funeral services. If you choose to use a funeral plan, your family will have to use a nominated funeral director or one from an approved list.

You can pay for a funeral plan in one of three ways:

1. A lump sum

If you decide to pay with a lump sum, you will choose your funeral package and pay your plan provider upfront. They will then organise your funeral and support your family when you die.


2. Instalments

Funeral payment plans vary by provider, but companies often allow you to stretch the payments out over several years, depending on the type of plan you choose. The full costs of your plan may not be covered until you have paid all of the instalments.


3. Monthly payments into a life insurance policy

Some providers use plans that are covered by insurance policies. When you die, the insurance payout goes to pay for your chosen funeral services. As they are fulfilled by insurance providers, these types of plans are regulated by the Financial Conduct Authority. This means they come with Financial Services Compensation Scheme (FSCS) protection. You will not be covered for the full costs of your chosen services until After you have been paying into the plan for a certain length of time, often around two years.

What’s included will vary between provider and type of plan, but some will allow you to choose from a wide range of options, including transport for family members and what music you would like played during the service.

Some funeral plans will not always cover the full cost of a funeral. This will depend on the provider and plan you choose. Be sure to ask what costs might be missing from the plan. That way, you will have a better idea of what you or your family may need to cover.

older couple looking at ipad.

Why use a funeral plan?

Thinking about your funeral might not be your highest priority right now but having something in place can give you peace of mind. After all, it’s one of the only sure things in life – we’re all going to need a funeral one day.

And with the cost of funerals rising each year, it can be useful to think ahead and let your family know that you’ve made a plan.

Anything you can do to ease the financial and emotional strain on your family will be a big help at a difficult time.

Here are five popular reasons why people get a funeral plan:

1. Funerals are expensive

The average cost of a basic funeral now stands at £4,417*, more than double what it was in 2004. Using a funeral plan will ensure that either some or all of these costs are covered, irrespective of whether funeral costs increase in the future.

It’s important to remember that the cost of a basic funeral does not include any extras, such as flowers and a buffet at the wake.

Even if you check how much funerals cost today, there’s no way of knowing exactly how much they’ll cost when you die. Costs are rising every year and your family could be left to cover the shortfall.

If you plan ahead, you can manage the cost of the funeral you want and avoid leaving a bill for your loved ones.

*SunLife Cost of Dying Report 2020


2. It really helps your family – not just financially

Having a funeral plan in place is one of the final ways you can make a hard time for your family a little easier. Reducing the emotional stress for your loved ones is a huge factor in getting a funeral plan for a lot of people.

The last thing they’ll need at a difficult time is being left to decide whether you ever really liked roses, or if that song was really the one you wanted played at your service.

With the tough questions and money worries out of the way, your loved ones can spend more time together to grieve and celebrate your life.


3. You can make your wishes known

Telling your loved ones what you’d like means they’ll have fewer decisions to make and is a way to ensure your wishes are honoured.

Perhaps you want to be cremated wearing a specific item of clothing or with something that means a lot to you. Or maybe you don’t want a traditional funeral but would prefer a direct cremation . Either way, you can rest assured knowing your wishes can be met in as much detail as you want.


4. You have independence until the end

None of us want to be a financial burden to anyone, let alone our children. Leaving a plan for our funeral ensures that our final act of independence is carried out – something that’s important to many people. For those of us with children, it gives peace of mind that we’ve been parents until the end.


5. You can ensure you’ll have a proper send off

Whether you want a traditional funeral with cars for your family and a memorial wake afterwards, or whether you’ve got some unique, weird and wonderful funeral requests, you can make sure that your wishes are met.

For some people, making sure they have a proper send-off is important. With a funeral plan, you can choose the celebration of life that you want.

*SunLife 2020 Cost of Dying Report

What do funeral plans cover?

What’s covered in your funeral plan will vary between providers and the different plans they offer. Plans will usually cover a basic funeral, so some extras may need to be paid for on top.

Be sure to check with your provider exactly what it is your plan covers, as this could be a big deciding factor on whether a funeral plan is right for you or not.

Here’s an example of what may and may not be covered by a funeral plan. Please note, this is just an example, and this will vary greatly between providers and plans.

What may be covered:

  • Guidance and advice on funeral arrangements
  • Funeral Director’s costs
  • Doctors’ fees
  • Recording of special requests
  • Coffin
  • Collection and transport of the deceased
  • Care of the deceased until the burial or cremation
  • Cremation or burial fees
  • Minister’s fees
  • Religious service fees

What might not be covered:

  • Bereavement support
  • Use of Chapel Of Rest
  • Family viewing
  • Any required transport
  • Funeral to be held on a weekend
  • Transportation if death occurs whilst on holiday or away from home
  • Burial plot
  • Headstone
  • A venue for the wake
  • Any catering for the wake
  • Funeral flower costs

Pros and cons of funeral plans

As with anything, funeral plans have advantages and disadvantages depending on what you’re looking for. Be sure to consider all options to make the best decision for you and your family.

Pros of funeral plans

  • Your family won’t need to fund the whole cost of your funeral
  • You will pay today’s prices for your funeral
  • You get to plan the type of service you want
  • You can shop around and pay the price you want to pay
  • Anyone can take out a funeral plan, regardless of your health
  • If you choose a national plan provider, you will probably be able to move within the UK and have your plan move with you
  • You can pay however you would prefer – in instalments, in full or with an insurance-backed policy
  • Research and selecting a funeral provider happens at a time without grief

Cons

  • If you decide to pay for your plan using instalments, you may not be covered for full funeral costs until you have paid all the instalments due
  • If you use an insurance-backed policy, you will need to go through a waiting period before you are fully covered
  • Some funeral plans won’t cover every aspect of a funeral
  • Unless you decide to choose a life insurance-backed policy, your provider will not be regulated by the Financial Conduct Authority
  • Not all plan providers include financial protection
  • Not all plan providers are a member of the Funeral Planning Authority
  • Most plans will not provide cover if you move abroad
  • You will need to find the money every month or in one lump sum, which can sometimes be difficult
  • Pre-packaged funeral plans might include things you don’t want but are still having to pay for, such as a more expensive coffin, but may exclude things you really do care about, such as a family viewing

Alternatives to funeral plans

Using a funeral plan is a popular way to put provisions in place, but it’s not the only way to do it. Other options might be better suited to you, so make sure you research everything to decide what might be best for you.


Over 50 life insurance

An over 50s life insurance plan pays out a set amount of money when you die. This sum of money will be left to your chosen beneficiary, tax-free. They can then use this money to pay towards your funeral.

This can be a good option for people that want to put some sort of provision in place, but don’t want to consider the specific details of their funeral just yet.

With this type of plan, you pay a monthly premium, which along with your age, will decide the cash paid out on your death. It’s worth noting that these plans and their cash payout do not increase with inflation. See our over 50s life insurance guide to learn more.


Savings and investments

If you decide to use savings or an ISA to pay for your funeral, and you pay into it regularly, you might benefit from savings rates that increase the amount of money saved.

The downside of this is that savings rates might not increase at the same rate of inflation, and there’s no way of guaranteeing the money you save will be able to cover the full cost of your funeral in the future.


Paying from your estate

Funeral costs can be paid for from your estate after you die. Some banks will release funds to pay for a funeral from the person’s account who has passed away, if they are given an itemised bill from the funeral director and a copy of the death certificate.

If your bank won’t accept this, your family will need to pay for the funeral themselves and get reimbursed when the Probate process has been completed.

It may take a while for the money to be released from your estate, as the process can take a long time, depending on the size and complexity of the estate.


State support

If you’re entitled to state benefits, you may be entitled to financial support from the Government to help pay for your funeral. The support likely won’t cover all the costs, but it might be able to help in some areas.


What happens with the funeral plan when I die?

Make sure your family know you have a funeral plan and where the documents are kept. Then, when the time comes they will where to go to begin the next steps.

Sometimes people decide to store the information about their plans in their will, with a solicitor or at their bank.

Are funeral plans safe?

Funeral plans that are either paid in full or with monthly instalments are not currently regulated by the Financial Conduct Authority (FCA) or by the Financial Services Compensation Scheme (FSCS).

Insurance- backed plans however do fall under FCA regulation and your plan will be covered by the FSCS.

When researching funeral plans, be sure to check the provider is registered with the Funeral Planning Authority. They are an industry body with strict rules and regulations for funeral plan providers. This helps to reassure and protect customers buying a funeral plan.

Questions to ask your provider

Here are some questions that might help you when considering which provider or plan to go with. Never be embarrassed to ask questions. The more you research the more you will know exactly what you’re looking for.

  • What is included in the plan? What are potential costs that are not included?
  • What happens if you go out of business? How is my money protected?
  • What happens if I die abroad or away from home?
  • Am I able to make any changes to my funeral once I have taken out the plan?
  • Am I able to pick a specific funeral director?
  • If I decide to pay monthly, how long will I be paying for and how much will this cost each month?
  • What happens if I die whilst there are outstanding charges on the payment plan?
  • Are there any cancellation charges?
  • Is this an insurance back policy?
grandparent and grandchildren working in the kitchen

How to buy a funeral plan: a step by step guide

Buying a funeral plan is a big decision and you should research each option thoroughly before committing to it. If you decide it’s right for you, here’s the step-by-step process you can expect:

Step 1: Think about the best option for you and your family that would lessen any worry or stress when you pass away, discuss with your family what option might be best for everyone.

Step 2: Research different policies and talk to your loved ones about what might be right for you. Don’t just compare plans on costs. Research different providers’ reputations and accreditation's.

Step 3: Make sure the plan you are considering has enough cover to include everything that you want for your funeral. Most plans cover what you will need for a basic burial or cremation, whilst others will exclude things like doctors’ fees and headstones.

Step 4: Pay for your funeral plan, either in full or using a monthly scheme.

Step 5: Record the information of your plan and store it in a safe place. Inform a family member of your choices and let them know where the important documents are kept.

Where to get funeral plan advice

Use the links below to find out more information about funerals and funeral plans. You’ll be able to read more about your rights, the choices available, and any help with costs that you might be eligible for.

Bereavement Advice Centre – How to choose a prepaid funeral plan

Money Advice Service – Funeral plans and funeral insurance

Citizens Advice – Arrange a funeral

Which? – Funeral plans explained

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife and who provides the SunLife Guaranteed Over 50 Plans?

SunLife Limited distributes financial products and services , registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG, United Kingdom (registered in England and Wales, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

Phoenix Life Limited trades as SunLife and is the provider of the SunLife Guaranteed Over 50 Plan life insurance policies. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG, United Kingdom (registered in England and Wales, no. 1016269).

Who provides the Funeral Benefit Option?

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan, Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals is not authorised or regulated for this activity by either the Financial Conduct Authority or the Prudential Regulation Authority. Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.