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Understanding how Funeral Plans Work

A pre-paid funeral plan lets you pay in advance for the basic costs of a funeral. This means your family or your estate doesn’t have to find that part of your end-of-life expenses, when the time comes. In short:

  • A funeral plan pays for funeral director’s basic costs.
  • Some pre-paid funeral plans include third party fees (such as the cost of being buried or cremated).
  • Good funeral plans invest your payment in an independent Trust or an insurance policy.

Every provider’s plans are different

This does make it hard to compare funeral plan providers’ services, but everyone who’s a member of the Funeral Planning Authority signs up to deliver on the same promise. We will make sure your money is secure, we’ll keep evidence of that governance, and we’ll guarantee to pay the costs described in your funeral plan – no matter how much they increase.

Funeral plans don’t pay for everything.This is why it’s so important to work with a plan provider who explains things clearly. The last thing anyone wants is for their family to be worried by expenses they weren’t expecting.

Here’s an example: our pre-paid funeral plans are easy to understand. Three of them cover specific third-party costs up to an agreed limit. That allowance increases in line with the Consumer Price Index, every year. Two of our plans don’t include that allowance – they are simpler options, one for burial or cremation and the other for direct cremation – but both are ideally suited for families that want to minimise their expense now and guarantee a funeral director’s costs and support in the future. No matter how much those funeral director’s fees go up, our plans will cover them.

Every product has terms and conditions

End-of-life planning isn’t a comfortable subject. But that’s no reason to be shy when it comes to understanding the practical terms and conditions of a financial product. In all of our plans, for example, we explain that a funeral can’t go ahead until the funeral plan is all paid up. Commercially, that’s just good practice. We also include a caveat that says there may be an additional per-mile charge, if the funeral director has to travel more than 25 miles.

Good funeral plans do provide good value

We can’t predict what the cost of a funeral will be in the future. We do know – thanks to the Sun Life ‘Cost of Dying’ report – that on average, it’s likely to be more than £5,000 by 2023.

However, everyone’s funeral should be unique and personal. So the personal touches (things like an order of service, flowers, specialised transport, headstones or woodland burials), all add to the cost. But with the basic cost of a funeral director guaranteed in advance by a pre-paid funeral plan, your family will have fewer financial worries in the future.

The money is invested for the long-term

Members of the Funeral Planning Authority (FPA) make a commitment to invest your money in either a trust fund or an insurance vehicle that guarantees a payout when you die. And, as a key part of the Authority’s code of conduct, all members and the FPA itself pledges to pay for any funerals that aren’t covered – if, for example, a provider went out of business.

If you have any questions, our team’s always happy to help – general questions about funeral plans are more than welcome, anytime.