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A guide to funeral cover

A guide to funeral cover

The cost of a funeral can grow quickly, so it’s important to know the facts so that your family isn’t left to deal with the expense at a trying time. Our guide will get you clued up on pre-paid funeral plans and plenty more.

Kamran Altaf
From the Life team
minute read
posted 2 NOVEMBER 2019

How can I pay for my funeral?

Many people like to take out a form of funeral cover to ensure their loved ones are able to pay to arrange their funeral after they have died. It gives you peace of mind to know that they’ll be able to sort everything out without any added worry.

There are lots of different ways of paying for a funeral. The main ones include:  

  • Your family uses savings, which you’ve left behind through your estate, in order to pay for a funeral plan directly with a funeral director
  • Your funeral costs could be covered as part of a pay-out by a life insurance policy
  • Or, you could commit to a pre-paid funeral plan from a provider. This is typically paid for in monthly instalments or as a lump sum

So, funeral insurance exists then?

Yes, funeral insurance does exist as a form of cover that you can consider. 

Policies do vary greatly: some will just cover the funeral director’s bill, while others will pay for the wake or a plot in the cemetery, for example. Learn more about the average cost of a funeral, as there can be a significant difference in the price between a burial and a cremation. 

When it comes to pre-paid funeral plans, or any other service that promises funeral cover, be sure to read the wording of your policy very carefully. Some costs may not be met fully by your plan, and if this happens then your family may have to pay the remainder. 

How safe is my money in a pre-paid funeral plan?

A provider will typically place any payments you make either into a trust fund, or invest them in an insurance policy that pays out when you pass away. The Financial Conduct Authority (FCA) has rules to safeguard your money in these places; however, it doesn’t regulate funeral plans.

You may want to check whether a provider you’re dealing with is signed up to the Funeral Planning Authority (FPA) – a professional body that (along with its members) pledges if a provider goes bust, it will look into paying for ceremonies covered by funeral plans.

Also, if you pay using a credit card then you could be protected by Section 75 of the Consumer Credit Act 1974. Under the Act, a credit card provider has to protect purchases over £100 if there’s a problem with a good or service you buy, or if the company you are buying from goes bust.

What else do I need to know about funeral cover?

If you’d rather go ahead with a pre-paid funeral plan, be aware that different policies work in different ways. It’s worth noting too that there have been concerns raised more broadly about pre-paid funeral plans. 

Consumer groups have argued that individuals who pay for their funerals in advance could find that their relatives are lumped with extra costs after they die – and that this isn’t always as transparent as it ought to be. To that end, the Treasury opened a consultation process on the subject in the summer of 2018. 

So, once again, make sure you’ve done a thorough review and comparison all of your funeral payment options – not just pre-paid funeral plans – before you make a decision. We don’t offer funeral cover as a standalone policy. Therefore, in order to get funeral cover it could be better if you start with a quote for life insurance. 

The good news is that it can take you just a couple of minutes.

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