What options are available to spread the cost of your funeral plan.
Contrary to what many think you don't have to pay for the funeral in one go. In actuality there are three options to spread the cost of a funeral plan, each with its pros and cons, which we will look at in this guide.
In this guide you will learn
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4.5 mins
The three payment methods for prepaid funeral plans
Usually a funeral plan provider will offer up to three methods of repayment. Offering you the choice to pay for your funeral plan in the following ways:
Single payment
Monthly instalments (up to 25 years)
Fixed monthly payment up to age 90, or for life
What you need to know when you spread the cost of your funeral plan in a single lump sum
Firstly an obvious downside is that you will have to fork out the funeral plan's whole expense in one go. It is also worth mentioning that you can purchase the plan for yourself or somebody else.
Additionally you can buy what's termed a 'Joint' funeral plan. This type of funeral plan covers one funeral for you or the other person named in the funeral plan policy documents. Therefore the decision as to whether the funeral plan is used for the first or second death is left to the surviving plan holder.
When will my funeral be covered paying with a lump sum?
A primary benefit of paying for your funeral plan in a single payment, is that your funeral will be covered immediately after your payment has been processed.
Is acceptance guaranteed paying with a lump sum?
Yes, acceptance for a single payment plan is guaranteed.
What you need to know when you spread the cost of your funeral plan in
monthly instalments
To start with there is no charge for spreading payments over 12 months. (Although one Funeral Planning Authority registered provider allows you too spread the cost over 24 months without charge).
However, an instalment management charge will be included in the price when a it's paid over a term beyond 12 (or 24) months. The reason for this charge is because the funeral plan company doesn't have all the money upfront to invest.
Can I buy a monthly instalment funeral plan for someone else?
Similarly, to a single payment funeral plan, you can also buy what's termed a 'Joint' funeral plan with a monthly instalment plan. Which will cover one funeral for you or the other person named in the policy documents. Ultimately leaving the decision as to whether the funeral plan is used for the first or second death being left to the surviving plan holder.
Terms of repayment
Typical terms of repayment are from 1 to 25 years and the monthly premiums do not increase.
However, the repayment term may be reduced depending on your age. For example, a plan provider may want you to complete all repayments by age 80. Meaning the longest repayment term available to someone aged 75 years would be 5 years.
When will my funeral be covered with a monthly instalment plan?
You will receive the full benefit of your funeral plan as soon as all the payments have been met.
Will the cost of my funeral be covered if I die before all the repayments have been made?
Should you die before all payments have been made, your representative will have to pay the balance to your funeral plan provider before your funeral can go ahead.
Is acceptance guaranteed for a monthly instalment plan?
Yes, acceptance for a monthly instalment plan is guaranteed.
What you need to know when you spread the cost of a funeral plan in lower fixed monthly payments (FMP)
Firstly, the fixed monthly payment (FMP) option gives you the ability to spread the cost of planning your funeral over a maximum of 40 years.
Although to qualify for this payment method, you must be a UK resident between 50 and 80 years of age. At the date of application and have completed payments by your 90th birthday. For example, if you’re 75 years old, you could spread the cost over 15 years.
Will the Fixed monthly payments price change?
Typically, FMP monthly premiums are lower than monthly instalment options and do not increase. Although it depends on when you take out the funeral plan and how long you live.
Additionally, there is the possibility that you could end up paying more into the plan than the value of the funeral at the time it’s needed. We've covered what will happen if this is the case below.
Do any providers offer an overpayment rebate promise?
Indeed, however Golden Leaves is the only funeral plan provider to offer a unique overpayment rebate promise. Providing your loved ones with up to 100% of any overpayment. In most cases the overpayment is calculated at the time the funeral is needed.
Furthermore, you can buy an FMP funeral plan for yourself or someone else, but unlike a single payment or monthly instalment funeral plan, you can't put the funeral plan in joint names.
When will my funeral be covered with a fixed monthly payment plan?
Immediately. You will receive the full benefit of your funeral plan after 12 or 24 months payments have been made (qualifying period - depending on the plan provider you choose). Thus your funeral could be paid for after just a few hundred pounds worth of repayments, instead of a few thousand pounds!
Will the cost of my funeral be covered if I die before all the repayments have been made?
In the case you die before the 12 or 24 payments have been made, your representative will have to pay the balance of that period to your funeral plan provider before your funeral can go ahead.
A sum equal to 100% of the fixed monthly payments received can be paid directly to the Appointed Funeral Director as a contribution towards the cost of the funera,l or paid to the Estate.
Is acceptance guaranteed with a fixed monthly payment plan?
Acceptance for a fixed monthly payment plan is guaranteed.
Golden Leaves vs Golden Charter fixed monthly payment plan options
Golden Leaves and Golden Charter are currently the only two leading Funeral Planning Authority registered providers. That enable you to buy a funeral plan through the fixed monthly payment method. So here's a table of comparison,
| Golden Leaves | Golden Charter |
Eligibility at the date of application. | 50 – 75; and
| 50 – 80; and
|
Is acceptance guaranteed? | Yes. There are no health questions, no medical and no credit check. | Yes. There are no health questions, no medical and no credit check. |
How long is the payment period? | Up to your 90th birthday; or | Up to your 90th birthday; or |
When do I qualify for funeral cover? | After 12 monthly payments, as long as you continue making the payments. If you should die as a result of an accident within 12 months of taking out your plan, your funeral service as detailed in your funeral plan is covered. | After 24 monthly payments, as long as you continue making the payments.
|
What happens if I die before the qualifying period? | Provided that all the fixed monthly payments due within 12 months have been paid, a sum equal to 100% of the Fixed Monthly Payments received, can be paid directly to the Appointed Funeral Director as a contribution towards the cost of the funeral or paid to the Estate. | Provided that all the fixed monthly payments due within 24 months have been paid, a sum equal to 120% of the Fixed Monthly Payments received, can be paid directly to the Appointed Funeral Director as a contribution towards the cost of the funeral or paid to the Estate. |
Are the monthly premiums fixed? | Yes | Yes |
Is there a deposit? | Yes - £25.00 | No |
What happens to any overpayment? | Golden Leaves offer a unique Overpayment Rebate Promise, where your loved ones can get up to 100% of any overpayment.
| There is no refund. |
What happens if I want to cancel my plan? | You will receive 100% of any money you have paid, if you cancel your funeral plan within 30 days of the start date. There is no refund if you cancel after the 30 days, and there is no cash in value. | You will receive 100% of any money you have paid, if you cancel your funeral plan within 30 days of the start date. There is no refund if you cancel after the 30 days, and there is no cash in value. |
Terms & Conditions apply.
