Are prepaid funeral plans a good idea?



During your lifetime you’ve given emotional support to your loved ones and financial support too when you can.  

Choosing to prepay your funeral now provides that same support for those you leave behind, at a time when they need it most.   You and your loved ones will have peace of mind knowing that they are protected from the worry and ever-increasing expense, and from organising your funeral at an already difficult time. 

Who is this guide for? 

  • Anyone curious about how a prepaid funeral plan works
  • Anyone who wants to protect their loved ones from rising funerals costs and the emotional upset of organising the funeral
  • Anyone considering planning their own funeral or for someone else 

Reading time:

 5 mins

How does a prepaid funeral plan work?

When the funeral is needed, a single phone call will release the funeral plan monies to the appointed funeral director, who will take care of all your carefully planned funeral arrangements.  

Before we go through the steps in a little more detail that lead up to buying and redeeming a plan, here's an overview of the prepaid funeral plan buying lifecycle.

Buying lifecycle of a funeral plan - Infographic

1.  The funeral cost is fixed at today's prices

green underline

When you buy a prepaid funeral plan (for your or someone else), you are paying the cost of the funeral director's fees up-front, fixed at today's prices. This protects loved ones against future price rises, which have historically risen way beyond inflation since records began in 2004. 

As well as prepaying the funeral director's fees, you can also choose a funeral plan that includes all or some of the necessary third-party cremation or burial fees. 

You pay the funeral plan provider direct - either in a single lump sum or in monthly instalments. Instalments up to 12 months are interest-free.  

Average UK funeral cost in 2021

Basic funeral       £4,417
Includes the funeral director's fees and the average cremation and burial fee.

Comparable basic prepaid funeral plan   £3,961
Includes the funeral director's fees and the average cremation and burial fee.

(1) Cost and definition of 'Basic' funeral as referred to in the 2020 SunLife Cost of Dying Research report.  
(2) The average price of a 'Traditional' type funeral plan (comparable with the SunLife 'Basic' definition) from a Funeral Planning Authority registered provider listed on Before You Go Compare.  Price includes the necessary third-party cremation or burial fees.

2.  Your funeral director is appointed

When you purchase a plan from a funeral plan provider, a condition of registered Funeral Planning Authority members is that the funeral director (or plan provider)  is appointed at the time you take out your plan.  The contract to deliver the funeral at the agreed price is legally binding.

3.  Your funeral money is ring-fenced 

To comply with the Financial Conduct Authority (FCA) rules*, the funeral plan provider must set aside the money to pay for your funeral in a whole of life insurance policy or trust, which is kept separate from the plan provider. The funds will be released to pay the funeral director at the time of your funeral.

Any administration fee that the funeral provider deducts from the amount you pay does not affect the funeral service to be provided.  Your funeral plan is a legally binding contract.  The funeral you buy is the funeral you get.

*Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

4.  You receive your funeral pack within 30 days

The plan provider will send out your funeral pack within 30 days.  

The pack will confirm the content of your plan.  A second pack will be provided which you should pass on to someone you trust (your "representative",  e.g. next of kin or executor of your will), to oversee the funeral arrangements.  It will contain instructions on what they need to do when you die.

5.  Get 100% refund if you change your mind within 28 - 30 days

If you change your mind after you have bought your funeral plan, you have up to 30 days in which to cancel for a no-quibble full refund.  If you cancel after this time, you may be required to pay a cancellation fee.  Check the plan provider's terms and conditions for details.

6.  Your representative makes one call when the funeral is needed

Your next of kin calls the number in the pack which will either go through to the appointed funeral director or the plan provider. The funeral arrangements will then begin.

Depending on the terms of the plan and how you pay for it (i.e. in instalments or fixed monthly payments), extra services can often be added to the plan during the lifetime of the plan or at the time of the funeral arrangement. 

Funeral extras

Depending on the terms of the plan and how you pay for it (i.e. single payment, in instalments or fixed monthly payments), extra services - such as family cars -  can be added during the lifetime of the plan or at the time of the funeral arrangement. 

About the Author

Follow me

Andrew is one of the founding team members of Before You Go. He's passionate about ensuring funeral consumers put the right funeral plan in place, and that starts with being given a choice from several providers. When he's not totally immersed in all things consumer funeral related and tech, he loves nothing more than watching Fireman Sam with his two young children. Eating chocolate brownies comes a close second.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}