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How Prepaid Funeral Plans Work

The average cost of a funeral has gone up a staggering 130% since 2004. A prepaid funeral plan allows you to pay for your funeral in advance. It freezes the costs of the services included in your plan at today’s value. That means the services you paid for will not be affected by inflation – no matter how much the prices increase in the future. This guarantee works because a good prepaid funeral plan provider puts your money either into an insurance policy or into a trust fund where it is managed independently from the company’s money. Funeral plans are neither an investment product nor are they the same as an over 50’s insurance, though. The latter is a type of life insurance that pays out a lump sum when you die – and it may or may not be enough to cover the funeral expenses. The main difference to a funeral plan is that whoever is the beneficiary of that insurance can do with the money whatever they like. They don’t necessarily have to spend it on your funeral. When you purchase a prepaid funeral plan, you decide upfront on the most important arrangements of your final “goodbye”. This gives you the peace of mind that there won’t be an unnecessary financial burden for your family when you die and it gives your loved ones the confidence that they’re acting on your wishes when the time comes.

This post will explain in-depth what prepaid funeral plans are, what is covered in them, what benefits they have compared to other ways of paying for your funeral, and answer some of the most frequently asked questions around prepaid funeral plans.

What are Prepaid Funeral Plans?

The short answer is: Prepaid funeral plans are a savvy way to prepare financially for the ending you want, for you and your family. In 2021, a basic funeral cost £4,184 (source: SunLife “Cost of Dying” report) – and that is only half the total cost of dying as it doesn’t include professional fees or send-off costs yet. Depending on the provider and the package you choose, prepaid funeral plans include different key features but they usually cover two essential things: the cremation or burial fees and the services of a funeral director. Most of them exclude third party costs like doctor’s, minister’s or celebrant’s as well as cemetery fees, flowers, etc – even though some providers have funeral plans that may include an allowance for these expenses. It is therefore worth reading the terms and conditions of each funeral plan very carefully before you decide which one is right for you.

Once you have chosen a funeral plan, you select a payment option. Most providers allow you to either pay in full or in monthly instalments over 1-10 years. If you opt for the latter and die before you finished paying the last instalment, most providers will only allow you to activate the funeral plan when any outstanding balance has been settled by your representative.

After purchasing your funeral plan, you will receive a certificate. If the prepaid funeral plan provider is registered with the FPA (Funeral Planning Authority), you will also be able to trace your plan for free. Your money will get put in a trust until it is needed for your funeral when you die.

When the time comes, your family can activate your funeral plan with just one call. Therefore, it is very important that they know you purchased a prepaid funeral plan and what it covers. Once you have put your affairs in order, you can focus on living life with the peace of mind that end of life planning provides.

Prepaid Funeral Plan Benefits

You might be asking yourself “Are prepaid funerals worth it?” According to a report in “The Times” that was updated in February 2021, 1.3 million people in the UK believe so and have opted for this form of funeral finance. This section will explain the benefits of prepaid funeral plans. Let’s have a look at alternative ways to pay for your funeral first, though:

The law in the UK allows your family to pay for the funeral expenses with money from your estate– without it being subject to inheritance tax. This won’t protect you against the continuously rising funeral costs, though. Another option is the above mentioned over 50s life insurance – with its drawbacks of not having specific funeral arrangements in place and you potentially paying more premiums over the years than your family will be able to claim after your death as the lump sum doesn’t increase with inflation. You could, of course, simply start a savings account to help your family finance your funeral. This comes with the perk of growing your money with interest. However, it might not be enough to keep up with the steadily rising funeral costs. If you do decide to go down that route, make sure that it’s a joint account, so your loved ones will be able to access the money after your death.

A good prepaid funeral plan

  • … allows you to pre-plan your funeral and make the necessary arrangements for the sort of final farewell you wish to have – including the payment. It is one of the most helpful gifts you can give your family as they won’t have to worry about what you would have wanted nor will they have to make these decisions during an emotionally very difficult time.
  • … gives you the peace of mind that you’re not leaving your family with an unnecessary financial burden.
  • … locks the funeral expenses for the services covered in your package at today’s value.
  • … allows you to pay in full or in instalments over the course of up to 10 years.
  • … won’t require any questions about your health or a medical examination.
  • … has a money-back guarantee should you change your mind.
  • … can be transferred to another person if you wish to do so.

What is Covered in a Prepaid Funeral Plan?

A prepaid funeral plan covers the most essential elements of a funeral, but won’t include everything you need.

Every provider is different and usually offers a variety of packages. At Safe Hands, all funeral plans cover the cremation or burial fees as well as the services provided by the funeral director. Our Pearl, Sapphire, and Ruby plans also include an allowance for specific third-party costs like cremation/cemetery fee, doctor’s fee and minister’s or celebrant’s fee up to £1200 – which increases yearly in line with CPI. If the allowance doesn’t meet those expenses, then there’ll be a balance to pay.

The most basic and therefore cheapest option that you’ll find on the market is a Direct Cremation plan. It includes the transfer of the deceased to a funeral home or chapel of rest, the funeral director’s fees as well as a simple coffin. However, there is no event for your family to attend. This may not appeal to everybody but comes with its own set of advantages which you can learn more about in our post “What is Direct Cremation?” 

A prepaid funeral plan is one of the most thoughtful gifts you can give to your loved ones.
A prepaid funeral plan is one of the most thoughtful gifts you can give to your loved ones.

All the other Safe Hands Funeral Plans also include:

  • A funeral hearse and bearers
  • The organisation of the service at the crematorium or cemetery
  • Family support and guidance provided by the funeral director
  • A funeral procession from home or from the funeral home to the crematorium or cemetery
  • Visits to the chapel of rest at any time (subject to appointment with the funeral director)
  • The time of the funeral agreed mutually between funeral director and family*

The Sapphire and Ruby plans also include one or two following limousines respectively.

The following funeral expenses would not be covered by your prepaid funeral plan:

  • Embalming
  • A church service
  • A wake
  • Catering services
  • Obituary notices
  • Flowers
  • Burial plot
  • Memorial casket
  • Headstone
  • Memorial

There may also be additional fees if you die abroad and your body needs to be sent back to Great Britain or Northern Ireland or *if your representative chooses at the weekend or on public holidays. If you are not a resident of the local area, the cemetery or crematorium might charge you extra as well. 

We have put together a comprehensive table so that you can compare all Safe Hand Funeral Plans at one glance. As with any financial product, you shouldn’t be shy when it comes to understanding the practical terms and conditions. So, no matter which provider you go with, make sure they explain everything clearly and are happy to answer your questions should you have any. The last thing anyone wants is for their family to be worried about funeral expenses they didn’t see coming.

Prepaid Funeral Plans FAQs (applicable for Safe Hands Funeral Plans)

How old do I have to be to purchase a prepaid funeral plan?

Safe Hands Funeral Plans allows anyone who is over the age of 18 and a UK resident to buy a plan.

What if I change my mind after I have bought a plan?

No worries. If you do change your mind for whatever reason, you can cancel a plan free of charge within 30 days and Safe Hands will refund everything you’ve paid to date. If you decide to cancel after 30 days of purchasing a funeral plan, we will refund the monies you have paid to that date minus a cancellation fee. Please have a look at our terms and conditions for more detailed information.

What would happen if Safe Hands went out of business?

Safe Hands has your money managed in an independent trust fund held by Sterling Trust Corporation Ltd – specialist and independent trustees. So, they would ensure that your funeral plan is delivered should this unlikely event ever happen.

Can I upgrade or transfer my Safe Hands plan to someone else?

Yes, you can upgrade or transfer your Safe Hands funeral plan very easily. It is for example possible to purchase a “joint plan” right from the start. This option allows two named plan holders and provides benefits when either the first or second plan holder dies. If you don’t have a joint plan but there is an unexpected death in your family, you can still transfer your funeral plan to that family member. Just get in touch (we will need your request in writing), tell us what you’d like to do and we will take it from there.

What happens in regards to my funeral plan when I die?

Your representative must contact Safe Hands. Calling the phone number included on your plan certificate is enough to activate the plan as long as it’s been fully paid up. If that’s not the case yet, your representative will have to pay the balance that’s left before we can move ahead. 

It is important not to make any plans without first contacting Safe Hands. This is because our funeral plans can only be carried out by one of the funeral directors from our national network, or by one that we’ve instructed. 

As long as the plan is fully paid up, we’ll contact the funeral director with all the details needed to collect you from wherever you pass away. The funeral director will need the registrar’s certificate for burial or cremation before they can start making plans.

What about extra services like flowers or a choir?

The Safe Hands Funeral Plans are flexible insofar as we allow you to include details of extra services like floral tributes, a choir, orders of service that you will pay for in full or cover in instalments. If you make a payment towards the cost of extra services, then the sum you pay will act as a contribution towards the service. Safe Hands will increase that sum annually in line with CPI.

For more answers to frequently asked questions, please visit our FAQ page.

Why Safe Hands Prepaid Funeral Plans

At Safe Hands we have two missions: 

1.) to help every person, no matter what age, faith or belief, make end of life planning, a simple part of life. 

2.) to be the best – the most respected provider of funeral plans in the UK.

That’s why you can expect the following:

  • Outstanding customer service: We will go above and beyond to offer practical and emotional advice that helps people on all end of life matters.
  • Transparency: We continuously work hard to gain the trust of our customers through our uncompromising behaviour and our exceptional delivery. That’s why we don’t do jargon and there won’t be any surprises by hidden costs. Just clear, simple and easy to understand advice and solutions. We clearly say what we will provide and we deliver it.
  • A caring, empathetic and compassionate Bereavement Support Team who can talk to your family, when the time comes.
  • Flexibility: Even though Safe Hands is an established funeral plan provider, we are still young and dynamic enough to be agile, adaptable and fast to any request or demand. 
  • Safe Hands is regulated by the Funeral Planning Authority (FPA). That means we follow firm guidelines and the FPA checks that we invest your money safely in a trust that is managed independently from our company’s money. This is done to ensure that in the unlikely event that we would go out of business, our trustee would still guarantee to pay the costs described in your funeral plan.

Should you have any question about one of our products or end of life planning in general, feel welcome to get in touch with us via our contact page, by sending an email to [email protected], or by calling us 24/7 under the following phone number: 0800 917 7099.