Are Funeral Plans Worth It?

If you’re thinking about arranging your funeral in advance, it’s natural to ask one simple question: Are funeral plans worth it?

The answer depends on what you want a funeral plan to do for you.

For some people, a prepaid funeral plan offers reassurance that key funeral arrangements are in place and the services that matter to them are paid for. For others, keeping money in savings or making different arrangements may feel more appropriate.

There isn’t one answer that suits everybody. The useful question is not simply “Are funeral plans worth the money?” but: “Would a funeral plan give me something I value?”

Here are the things worth considering before you decide.

What does a funeral plan actually do?

A prepaid funeral plan allows you to arrange and pay for specified funeral services in advance. Depending on the plan you choose, that could include things such as:

• Collection and care after death
• A coffin
• Cremation fees
• An attended or unattended cremation
• A funeral service
• A hearse
• Pallbearers
• Funeral director services
• Arrangements for the ashes.

Not every plan includes all these things. That’s important to consider, because two funeral plans can have very different prices while also providing very different funerals.

When comparing funeral plans, always compare the actual services included rather than relying on the plan name or headline price.

Why do people choose prepaid funeral plans?

There are several reasons somebody might prefer to plan ahead.

You can make some of the decisions yourself

Rather than leaving your family to guess what you would have wanted, you can choose the type of funeral that reflects your wishes.

You might prefer a simple direct cremation, an attended service or something more traditional.

Making those choices in advance can give your loved ones clear guidance when the plan eventually needs to be used.

Specified funeral services are paid for in advance

With a prepaid funeral plan, you pay for the services stated in your contract when you arrange the plan. That can make future funeral costs more predictable for the services you’ve chosen.

However, a funeral plan doesn’t necessarily cover every possible funeral expense, so it’s important to check what sits outside the plan too.

Your family knows arrangements are already in place

After someone dies, there can be many practical decisions to make. Having a funeral plan means some of those funeral arrangements have already been decided. Your family or nominated representative contacts the provider when the time comes, and the plan’s covered services can then be arranged.

Are funeral plans worth it financially?

This is where the answer becomes more personal, and not everyone will feel the same way. A funeral plan isn’t an investment, and it shouldn’t be considered purely in terms of whether you will financially “make” or “lose” money.

Instead, consider what you’re paying for. You are purchasing specified funeral services in advance.

MoneySavingExpert notes that a prepaid funeral plan can cover some funeral costs and that people should check carefully what their particular plan includes.

If the funeral services included in a plan are services you genuinely want, paying for them in advance may appeal. If you don’t value those services, or would prefer to keep control of the money yourself, another way of making provision could be more appropriate.

What about rising funeral costs?

Funeral costs can change over time and vary depending on the funeral arrangements and location. A prepaid funeral plan fixes the cost of the specified services included within that plan under its contractual terms.

That does not mean every possible future funeral expense is covered. For example, your family may still choose additional flowers, catering, memorials or other services that fall outside the plan.

So rather than asking whether a plan covers “the funeral”, find out exactly which funeral costs are covered; and which aren’t.

Are funeral plans regulated?

Yes. Since July 2022, the Financial Conduct Authority (FCA) has regulated prepaid funeral plans. Providers and directly authorised intermediaries carrying out regulated funeral-plan activity must be appropriately authorised.

This regulation introduced additional consumer protections, including requirements around how plans are sold, value for money and arrangements intended to protect customers if a regulated provider fails.

Before buying from any funeral plan provider, it’s sensible to check its regulatory status.

What happens to my money?

How money supporting a funeral plan is held depends on the provider’s arrangements.

At Funerals with Grace, money paid towards the provision of the funeral is held in an independent trust and ring-fenced for that purpose. Eligible customers of authorised funeral plan firms may also have protection through the Financial Services Compensation Scheme (FSCS).

That additional protection is one reason regulation should form part of your comparison when choosing between funeral plan providers.

When might a funeral plan be worth considering?

A funeral plan may be worth considering if:

• You know what kind of funeral you’d like
• Making your funeral wishes clear is important to you
• You’d like specified cremation fees and funeral services arranged in advance
• You’d prefer your family to have fewer funeral arrangements to make
• You value knowing how the funeral will be provided
• You’d rather pay for specified services now than leave those costs to be dealt with later.

For some people, those benefits matter a great deal and for others, they won’t. Neither is right or wrong; it comes down to your individual thoughts and feelings.

When might a funeral plan not be right for you?

It’s just as important to consider the other side.

A funeral plan may not suit you if:

• You’d prefer to keep the money accessible in savings
• You haven’t yet decided what kind of funeral you’d want
• Flexibility is more important to you than arranging services now
• The plan doesn’t include the services that matter to you
• The payment terms don’t suit your circumstances.

You may also prefer another way of providing for funeral expenses. A good funeral plan provider should give you enough information to make that decision rather than pressure you into believing a funeral plan is automatically right for everyone.

What should I compare before choosing a funeral plan?

If you’re comparing funeral plans, look at more than cost.

Ask:

1. Is the provider FCA regulated? Check that the funeral plan provider is appropriately authorised.
2. What’s actually included? Check collection, care, coffin, cremation fees, attendance, funeral service and ashes arrangements.
3. What third-party fees are included? Look carefully at crematorium and other third-party costs rather than assuming they’ll all be covered.
4. Could my family need to pay anything extra? Some optional products and services will sit outside most funeral plans.
5. Who will provide the funeral? Find out how the provider works with funeral directors and whether you can use a local funeral director.
6. How is the plan funded and protected? Understand the trust or insurance arrangements supporting the plan and whether FSCS protection may apply.
7. What are the payment terms? Compare both monthly payments and the total amount payable.

So, are funeral plans worth it?

For the right person, they can be.

A funeral plan can give you the opportunity to choose your funeral arrangements, pay in advance for specified services and leave clearer instructions for the people closest to you. But that doesn’t automatically make every funeral plan good value, or the right choice for everybody.

The key is to compare what you’re actually buying. Look at:

• The funeral itself.
• What’s included.
• The price.
• How your money is protected.

Then ask yourself: “Does this give me something I genuinely value?” If the answer is yes, a prepaid funeral plan may be worth considering.

At Funerals with Grace, we offer four cremation plans ranging from a simple unattended direct cremation to a more traditional attended funeral, with plans currently starting from £1,595*. (*T&C’s Apply)

Our team can explain what’s included, how payment works and answer any questions you have; so you can decide for yourself whether a funeral plan is right for you.