A funeral plan is a simple and straight forward product which takes away your worries and cares about one of those inevitable events which few of us really like to talk about – your funeral.
A funeral plan is just that – your plan for the way in which you want your funeral to be conducted when the time comes.
Typically, that involves choosing one of your local firms of funeral directors to conduct the necessary arrangements – care for your body, its preparation, the provision of a coffin, and transport to the cemetery or crematorium.
You make your own decision about whether you prefer to be buried or cremated and also the type of religious service – if any – you want to be conducted.
By taking those decisions for yourself, you may save your family and loved ones some difficult and agonising decisions they are otherwise left to take about what you may have considered suitable and fitting – at a time when they are already weighed down by the grief of your passing.
Prepaid funeral plans
A funeral plan also provides a further considerable advantage – and that is the ability to pay for the arrangements in advance, at today’s prices, instead of the almost certain inflated cost at the time of your death.
In the five years between 2012 and 2017, the cost of the cremation alone increased by 33%, said the Daily Express newspaper on the 9th of May, noting that this is almost three times the 12% rate of inflation for the same period of time.
Since there is little indication of any let-up in such increases, the opportunity to pay for your funeral now, at today’s prices, appears to be a distinct benefit.
Indeed, it appears to be such an advantage that the Telegraph newspaper on the 2nd of August 2017, argued how surprising it is that only 6 per cent of people in the UK currently have a prepaid funeral plan, whilst as many as seven out of ten Dutch people have one.
How they work
The major providers of funeral plans in the UK are registered members of the industry’s self-regulator, the Funeral Planning Authority (FPA) and bound by its demanding code of conduct.
When you pay for a funeral plan, the provider makes a contract with your chosen firm of funeral directors to provide the services you have selected at a given price, whenever in the future the ceremony needs to be conducted.
On the strength of that contract, the provider of your prepaid funeral plan places the money you have paid over in safekeeping – either in an independent trust fund or used to purchase a whole of life insurance policy in your name. Through either of these safeguards, the money you have paid remains available and is sufficient to cover the costs of the eventual funeral that have been assured by the nominated funeral director.
If the firm of funeral directors goes out of business in the interval between your paying for the services and your eventual death, the funeral plan provider is obliged to secure the services of an alternative local firm