Funeral plans in-depth

Younger clients who have just started a family often tell us they want to sort out their estate, and when, as part of this, we start discussing funeral costs they usually agree that they wouldn’t want to burden loved ones – especially their partner – with having to organise a funeral.

They sometimes raise concerns about the stability of the plan — what would happen to the money if the company they had chosen to take out their funeral plan with was to close? According to insurers SunLife the cost of a basic funeral has increased every year for the past 12 years and will continue to rise.

It is important to understand that even if costs do rise, your funeral will still be covered and there won’t be anything extra to pay. This is because a contract will be in place between the funeral director and the plan provider that says the funeral director cannot refuse to carry out the funeral if costs do increase. This doesn’t mean, however, that they can’t ask for more money from the funeral plan provider but this will be the responsibility of the funeral plan provider – not you – to cover the cost, because the contract you will take out with them is at a fixed cost.

The family will, though, have to cover the cost of elements that haven’t been included in the cost of the plan, such as flowers and catering. There are plans available that will cover the cost of cars and other extras.

Another question that often comes up is: ‘Does my family get a lump sum when I die, or will the funeral just be paid for?’ The answer is that the funeral plan provider will notify and pay the funeral director directly, so your family won’t receive any money. 

It is also important to note that a funeral plan is different to an over-50s’ life insurance plan, where you could pay in more than you will receive. With funeral plans you pay a set amount and, if you choose a registered provider, the funeral is guaranteed to be paid for. At LR Estate Planning we use only registered funeral plan providers and the only situation in which your funeral might not be covered is if you die before finishing your payments or if you miss any payments.