What are prepaid funeral plans?

Do you want to decide for yourself how your funeral should be conducted after you die? Do you want to pay for those arrangements in advance, to relieve your family and loved ones from the financial stress and worry – at a time when they are already mourning your passing? Perhaps you want to make the arrangements for someone else, to give them the reassurance that everything is in order, and safely paid for, as they enter their final years?

Prepaid funeral plans allow you to do just that.

Here’s how they work

The principal role in any funeral is typically played by the funeral director. In addition to the care of the deceased’s body, its preparation and laying out for viewing, and arranging transport to the crematorium or burial site, the funeral director has many other duties which are outlined by the National Association of Funeral Directors (NAFD).

Not only do prepaid funeral plans let you pay for the services of your chosen firm of funeral directors in advance, but they also guarantee that that price will be held no matter how many years may pass before the services are required.

This is a significant benefit in light of the ever-increasing charges made by funeral directors in the UK. Research published by insurers Royal London on the 5th of October 2017 revealed that in the decades since 1980, funeral costs, have increased by an average of 3.9% or 1% more than the rate of inflation and, therefore, nearly as fast as house prices in the decades since 1980.

The lion’s share of those costs is taken up by the charges made by funeral directors and the fees for cremation and any minister officiating at the ceremony.

You may be reassured by the fact that prepaid funeral plans guarantee that the funeral director’s charges are entirely covered, whenever the time comes. Some plans go one step further and also guarantee cremation fees and those charged by the minister conducting the funeral service.

Trusting the guarantee

Your prepaid funeral plan provider is able to offer such guarantees because of the contracts which exist between the provider and your chosen firm of funeral directors. The latter are contracted to deliver the agreed services at the specified price whenever they are called upon to provide them, and any increase is a matter entirely between the funeral plan provider and the funeral directors. You are not involved in any way – your funeral plan provider’s guarantee may be relied upon.

Protecting your money

If you have paid in advance for services which may not need to be delivered until the passage of many years, you might rightly worry about the safety of that prepayment.

Funeral plan providers who are also registered members of the industry’s regulator, the Funeral Planning Authority (FPA) are bound by a code of conduct requiring them to place your funds for safekeeping in an independent trust fund or to purchase a whole of life insurance policy on your behalf.

If the firm of funeral directors you originally chose to make your funeral arrangements subsequently goes into liquidation, FPA members are also obliged to make their best efforts to identify an alternative, comparable firm in your area.