If you haven’t prepaid your funeral before you die, your family may discover, when they make the arrangements, that the purchase price of a funeral plan would work out cheaper than the funeral director's standard ‘at-need’ funeral price list – for exactly the same service. Alas, too late for all concerned.
We explain how that’s the case, and – knowing that – why you or your family can’t simply take advantage of the saving by purchasing your funeral plan in the days immediately before and at the funeral arrangement. Even so, once you understand how the system works, prepaid is still money saved.
Who is this guide for?
Why can the purchase price of a prepaid funeral plan, around the time of the funeral, sometimes be cheaper than the at-need cost for the same standard of funeral?
Before we answer that, here’s the source of our information, so you know it’s credible:
Competition & Markets Authority (CMA): Funerals Market Investigation 2020. Appendix F: 5.153
"[Prepaid funeral plans] are often sold at a lower price than at-need funerals."
Now, in order to solve this riddle, we need to look at some numbers. Don’t worry, we’ll take it slowly!
Here are the most common scenarios:
"Now that I know all this, why doesn't my family just buy a funeral plan at the time my funeral is needed instead of paying in advance?"
The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 stipulates that, in regard to prepaid funeral plans:
The person for whom the funeral is for, needs to be “living at the date when the contract is entered into” and a funeral contract cannot be entered into if "at the time of entering the contract, the customer and the funeral plan provider intend or expect the funeral to occur within one month".
So what does happen if I take out a funeral plan and then need my funeral within one month, but my death was not due to an accident?
Terms differ between providers. You should check these carefully when buying a plan, and especially if there are concerns that your life expectancy could invalidate the plan in the manner described above.
How you can help your family with the funeral arrangements and cost from beyond the grave?
There’s a well-known business acronym called the Five Ps: proper planning prevents poor performance. We have our own version that perfectly sums up our message to you: prepaid planning prevents posthumous poverty. pre-posthumous planning prevents payment poverty!
Let’s break that down a little to illustrate why prepaying and planning your funeral in advance is so important for those you leave behind.
- 1Arranging the funeral is often when the heart rules the head. Typically, bereaved families "want the best" and then they worry about how they are going to pay for it afterwards. If you've already paid for your funeral, you can still have the best and save your family unnecessary added expense.
Your family won't feel pressured into paying more than they need to, when you die.
- 2Your family won't have to spend time shopping around for the best-value funeral.
Once your plan is in place, the funeral director or the funeral plan company itself has been nominated to carry out your funeral and is under contract to deliver it for the fixed amount agreed on the day the plan was purchased. Your family won’t have the distress of hunting for a good deal at a time when they are already coping with their loss.
- 3Your family will be saved from the expense of your funeral.
The further in advance you plan, the more loved ones will save, as they will be avoiding the increases in funeral costs in the intervening years (see Rise in funeral costs). And, depending on your preferred payment plan, your funeral will all be covered by then. It’s something else they’ll remember you fondly for.
- 4Your family won't have the heartache frequently experienced when organising a funeral.
You will have sorted out the details, leaving them with fewer or possibly no decisions to make, which eliminates any worries about whether they've done right by you.
- 5You will help your family avoid possible arguments and conflict.
Documenting what you want for your funeral gives loved ones clarity over the details. Grief affects different people in different ways, but it always takes its toll. Family members and close friends may have opposing views about who knew you best and how you’d want your funeral to go (and what should happen afterwards). It is a no-win situation that can cause upset and division, which is the last thing you’d want as your legacy. Documenting what you want, whether it’s in black and white, or on an audio / video recording, or giving named individuals your express permission to make those choices, removes any uncertainty.