While it’s not something we like to think about, having funeral plans in place can help remove the worry of costs later on for both you and your loved ones
The cost of funerals has been steadily increasing since the 1980s. So, if you're planning ahead, paying for your funeral now and locking in today’s prices could prove to be a very savvy investment.
“A pre-paid funeral plan is a good way to protect against future funeral cost increases, as you fix the cost at the time of purchase,” says Louise. “Many people don’t bother with pre-paid plans because they think their assets will cover the cost of their funeral. But, how accessible are those assets? Would your relatives be able to access the money needed quick enough to pay the funeral bills?”
The benefit of pre-pay plans is that they sit outside of your estate, so they aren’t subject to probate rules – or inheritance tax – and the money can be released immediately to pay the bills.
If you can’t afford to pay the cost of a funeral up-front, another option is to go for a pre-paid plan, but with the costs spread over a set period. The drawback is you may have to pay additional fees compared to paying everything at once.
Alternatively, you could take out an insurance policy that may cover the basic costs of your funeral, depending on the type of policy you take out. But make sure you understand exactly what is covered and how much of your funeral would be paid for. It's also important to understand that, as with all insurance policies, you could pay in far less than the cost of a funeral and get a pay-out – but, if you pay in for a long time, you could pay in more than you get back.
There are a number of different ways to fund a funeral, and you'll need to compare the options, read the small print and work out which is the best option for you. But whatever plans you make, don’t forget to tell someone about them.
More information on funeral plans and insurance policies can be found at the Money Advice Service.
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