Funeral Finance Plans
Funerals can be expensive, costing on average £2500 - £3000 in 2009. The majority of people will pay the money directly from their estate, when the inevitable day comes, but many people worry that when they die, they won't actually leave enough money to cover the funeral costs, and that's where pre paid funeral finance plans come in. With a funeral plan from a designated funeral plan provider, you arrange and pay for it in advance, be that for your own funeral, or even somebody else's.
Some people however, may wish to organise their own own funeral plan investment, using a high interest account or even stocks and shares, but for people who more than anything just want peace of mind that their funeral costs will all be covered, a pre-paid funeral plan could certainly be the right choice.
In this section, using information from the Financial Services Authority (FSA), we set out how funeral plans work and what you might need to think about before arranging one.
What is a funeral plan?
A funeral plan is a way of paying for a future funeral in advance.
How does it work?
You pay either a lump sum or instalments to the plan provider, or to a funeral director. Your money is either invested into a trust fund with trustees, or in an insurance policy, which is then used to pay for the funeral whenever that turns out to be. The aim of both methods is to safeguard your money until it's needed, ensuring that it's used to provide the funeral you have paid for. Plan providers who use these methods do not need to be regulated by the FSA.
Because the plan providers are not authorised by the FSA, their complaints and compensation arrangements do not apply to funeral plans that use trust arrangements or insurance policies for your payments.
Plan providers can register with the Funeral Planning Authority (FPA), if they agree to meet its requirements. Registered providers will be subject to the FPA's arrangements for resolving disputes between its registered providers and their customers.
Questions to ask the plan provider, yourself and your adviser:
* Does the plan allow you to choose the funeral director?
* What if your chosen director goes out of business?
* What happens if the person the funeral is intended for dies abroad or away from home?
* Can the funeral director arrange a funeral of a different standard from the one you have chosen?
* Could there be any other expenses for the funeral, and what happens if there are?
* Is it possible to cancel the plan if circumstances change - for example, if youve arranged for your spouses funeral but you later separate?
* Are there any cancellation charges?
* If you pay by instalments, how long do you do this for and do you have to pay interest?
* What happens if there are outstanding instalments/payments at death?
* What freedom do you have to change the details of your funeral plan?
1.Make sure you have a written record of the arrangements and keep it safe. You should receive a plan confirmation.
2.It's a good idea to ensure that your next of kin knows you have already paid for your funeral and what the details are.
3.Check to see that the plan provider has a clear complaints procedure, and is a member of the Funeral Planning Authority, the industry's professional body. Members must follow its standards when dealing with you and when considering any complaints.
Below is a selection of funeral plan providers. There are quite a few around. Follow the links to see if one of the plans may suit your needs.
Co-operative Funeral Plans
If you want some more advice on how to budget, you could also find financial help here.