Life After Your Death: How To Choose a Funeral Plan

Posted on: December, 28, 2013

A funeral plan can protect your family from unwanted expenses when you die. But how to choose a funeral plan – Our simple guide will help you ensure that you have the right plan in place.

Few people want to think about what happens when they die. While the subject of funeral arrangements may seem rather macabre, the reality is that this is something you need to think about while you are still alive. The cost of a funeral can run into many thousands of pounds, and if you do not make provision before you die, you could burden grieving loved ones with an unwanted bill. Funeral plans offer you the opportunity to ensure that your death does not cause financial hardship. Make sure your funeral plan covers you with this simple advice.

Understand why you need a funeral plan

A funeral plan provides insurance that pays out for the cost of your funeral in the event of your death, so understanding how to choose a funeral plan is very important, so that you don’t underestimate the cost of a funeral or forget to include any important items.  As well as the obvious costs (such as the coffin, the transport, flowers, use of venue) there are other bills that you may not consider. These can include disbursements or costs paid to other parties, such as the undertaker, the minister or the crematorium.  All in, the cost of a funeral could be as high as £10,000. Is that something that you would expect your family to pay when you die?

Choose the right level of cover

The total amount of cover will vary from one plan to another. You must decide how much you think your funeral will cost in total.  You should also ensure that you understand exactly what the plan covers. Always take into account any personal requirements that you have.  You may want a specific type of coffin. You may want pallbearers, or even a notice in the newspaper. All these things cost money, so confirm what your plan covers.

Ensure you understand how your plan works

Funeral plans work in different ways. Normally, you will pay for a funeral plan in monthly installments. You need to ensure that you can afford the monthly cost. When you die, your plan will normally pay a lump sum. Check how the insurer pays this. If the insurer places the sum in trust then your family can be confident that they can use it all for the funeral. If the insurer pays the sum into your estate, your inheritance tax liability may absorb it. Some plans may restrict who can apply, while others will guarantee acceptance. Check whether the plan guarantees cover, too. Some plans will cease cover if you reach a certain age. If you are unsure, you may be wise to talk to a financial advisor to get more expert advice about how a plan works.

Choose the right company

When you pay money into a funeral plan, you want the peace of mind that your cash is safe. It may be wise to choose a well-established company. A smaller, unknown company may go out of business, taking your investment with it. Check whether the company is part of a professional body. The UK Funeral Planning Authority maintains a code of practice. It may therefore be worth choosing a company that belongs to this organization. If you choose a local company, make sure you know what happens if you move or retire away.  Check whether you can update or change your plan later on, as well. As your needs change, the amount of money that you need may change too.

Ensure that your family is aware

A secret funeral plan is no use to anyone. If your family knows nothing about the plan, they may make separate arrangements. You do not want to waste your investment! Ensure that your nearest and dearest have details of the plan, and know what to do in the event of your death.  Ensure that your solicitor keeps a copy of the plan details with your will. If you have an accountant, ensure that he or she has a copy of the plan too.

Planning your own funeral is not something that you are likely to relish doing. The fact is, however, that the cost of your funeral could cripple your loved ones at a time when they are already grieving. Take steps to ensure that you have the right cover now and select the right funeral plan for you.

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