Pre-Paid Funeral Plan
How to select and pay for your funeral in advance
Why should we think about paying for our own funeral?
Most of us as we get older, expect to provide the money to meet our funeral expenses. We're not morbid. Its to do with independence and responsibility. Leaving everything in order for our relatives and friends. We don't often talk about it - because there is no need to - but the fact is that funerals cost money, and we want to take care of the cost.
Providing for funeral costs in advance - what are the options?
There are three main options available to someone who wants to provide now, for the cost of a funeral in the future.
1. Savings or Investments
You can put the money in a saving account, or invest it, against the day when it will be needed. This involves a risk: the sum available at the time might be sufficient to pay for the funeral (indeed if your investment is good there might be money left over) but it might not be enough. Reports have shown that funeral costs have risen faster than the official rate of inflation: for example the cost of an average funeral increased by 25% in only three years, from 1990 to 1993. Very few savings can match that sort of increase. (Source: Third Age International).
2. A Whole Life Insurance Policy
Insurance policies are sometimes advertised to cover funeral costs, often offering "free gifts", but they have been heavily criticised in the press. Most people are likely to pay in far more than the cost of the funeral. To calculate the true cost you have to multiple the payment by your life expectancy in months - the results can be staggering! Sometimes these policies do not even guarantee to pay for the funeral in the early years.
3. A Guaranteed Funeral Plan
An increasing number of people choose to pay for their funeral themselves now, rather than set aside a sum of money or an insurance policy towards the cost. With the savings or insurance options your family will usually have to pay for the funeral themselves then hope to get the money from your estate, often months later. But with a guaranteed funeral plan the service has already been paid for - a much more practical solution.
