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Pros and Cons of Pre-Paid Funeral Plans

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Pros and Cons of Pre-Paid Funeral Plans

edited 30 November -1 at 1:00AM in Over 50s Money Saving
73 replies 101.3K views
JPSCJPSC Forumite
30 posts
edited 30 November -1 at 1:00AM in Over 50s Money Saving
I cannot see an earlier thread on this topic, but if I have missed one then apologies in advance.

My parents, in their late 80s, are looking into these plans and I have no experience of the advantages and/or disadvantages of using them, so thought I would consult the collective wisdom of MSE, hoping to be able to tap into some actual experience.

Obvious advantages seem to include fixing the cost at today's level and being able to negotiate exactly the arrangements you want for yourself. Against that, what happens if the Funeral Director involved goes out of business?

I am sure there are many other points to be considered
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Replies

  • dzug1dzug1 Forumite
    13.5K posts
    The plans are normally with an insurance company, not directly with the undertaker, so that's a non-worry.

    And it's been discussed very recently - only one page down at the moment

    http://forums.moneysavingexpert.com/showthread.html?t=1749865
  • scotsbobscotsbob Forumite
    4.6K posts
    JPSC wrote: »
    I cannot see an earlier thread on this topic, but if I have missed one then apologies in advance.

    My parents, in their late 80s, are looking into these plans and I have no experience of the advantages and/or disadvantages of using them, so thought I would consult the collective wisdom of MSE, hoping to be able to tap into some actual experience.

    Obvious advantages seem to include fixing the cost at today's level and being able to negotiate exactly the arrangements you want for yourself. Against that, what happens if the Funeral Director involved goes out of business?

    I am sure there are many other points to be considered

    The cost that you fix is usually only for the undertakers fees. Newspaper insertions, council fees (digging graves, crematorium fee) etc etc will increase and when the time for the funeral arrives some years in the future you may think all costs are covered but you will have to pay these additions.You should find out exactly what is prepaid, item by item.

    Any money you pay now will of course not be gaining any interest and that should be factored into the costs
  • zzzLazyDaisyzzzLazyDaisy Forumite
    12.5K posts
    tbh I don't know why people bother with these plans. If cost is likely to be an issue, then why not set aside some money in a joint account with whoever is going to have responsibility for arranging the funeral. The money passes automatically to the surviving joint account holder, and access is not held up by probate.
    I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.
  • gettingbettergettingbetter Forumite
    1.4K posts
    Mortgage-free Glee!
    hi

    my parents and grandmother
    have these pre paid funeral plans
    as far as i can work out the pay a
    small insurance premium each year
    which cover the cost of the funeral

    they didcussed with the funeral director
    what their wishes were and it is
    also in there will what is to be done
    and where they are to go

    i personally think they are a
    good idea as it takes all the stress
    off the family

    just my opinion

    kas xx
    br no 188 ;) AD 17th apr 09:D
    :Dmortgage free 22/5/09:D
    :Ddebt free 11/8/09:D
    :j#18 £2 saver = £ :T sealed pot #333
    silent member of mikes mob
    i will lose weight :rolleyes: i will sort my house :o
  • JPSCJPSC Forumite
    30 posts
    Thanks, everyone
  • HillyoneHillyone Forumite
    14 posts
    Bit late to join this thread, I think, but I came across it when searching for "Funeral Plans" for myself.

    My mother died in April. We have all been just so relieved that she (and my dad, still alive) have pre-paid Funeral Plans. Not only have the family been relieved of the worry of cost, there was immediately a named Funeral Director we could contact, 24/7, so we didn't have to search for one. The funeral arrangements couldn't have gone better, and everything was beautiful, but as we were told - we had £4,000s-worth of funeral for the price of £1,600 something - the cost when the plan was taken out, years ago.

    That has persuaded me to organise something for myself. I was to save my children from the aggravation at a time when, as I've now discovered, you least feel like doing anything.
  • WhitefiverWhitefiver Forumite
    619 posts
    Part of the Furniture 500 Posts
    ✭✭
    Hillyone wrote: »

    That has persuaded me to organise something for myself. I was to save my children from the aggravation at a time when, as I've now discovered, you least feel like doing anything.

    I couldn't agree more. My parents both had a pre-paid plan, and for me, it made life very simple when the time came, and certainly much easier for me to cope with organising things (I'm an only child living, some way from home).

    Our director too was great, and helped us tremendously. The event itself cold not have gone better either.

    If you can afford it, it is worth doing.

    Regards,

    White.
  • datostardatostar Forumite
    1.2K posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭
    My 85yr old father died recently while staying with my sister quite a distance from his home. He had a prepaid plan which he had taken out about 20 years ago. I won't mention the company but they do have national coverage. My sister contacted them and they provided a choice of 3 Funeral Directors. The one she picked did a marvellous job. Extras came to under £200, mainly preparation and the facility for the family to view at the Chapel of Rest. Funds can certainly be released from bank accounts, NS&I etc. for funeral expenses but it still takes time and they want to see a lot of documentation such as death certificate, will, invoice etc. The joint account is a good idea, but not feasible for everyone. I can't think of any significant drawback, really, and I'll probably take one out myself before much longer.
  • GoldenyearsGoldenyears Forumite
    293 posts
    100 Posts
    ✭✭
    I don't see any advantage in these plans for actually organising the detailed conduct of the funeral. It comes down to whether a surviving partner or other relative has a problem with suddenly coming up with say about £2000-2500. We were fortunate in not having this problem when my mother died in May and we organised a beautiful service with a local undertaker. She had no funeral plan although it was always an option with her small Sun Life policy.
  • edited 9 July 2010 at 12:28PM
    Stuart_WStuart_W Forumite
    1.5K posts
    Part of the Furniture 1,000 Posts
    ✭✭✭
    edited 9 July 2010 at 12:28PM
    tbh I don't know why people bother with these plans. If cost is likely to be an issue, then why not set aside some money in a joint account with whoever is going to have responsibility for arranging the funeral. The money passes automatically to the surviving joint account holder, and access is not held up by probate.

    Money set aside in a joint account is unlikely to grow at the same speed as the costs of a funeral rises.

    This graph is designed to show this
    http://www.co-operative.coop/Funeralcare/fusion/v2/COOP_Graph.jpg
    (although it must be acknowledged this is from advertising material for a funeral bond so there is an agenda in how this is presented).

    My parents-in-law set aside an amount in an account 10 years ago. My mum has a funeral bond. Let's just say one is now worth more than the other in terms of what it will cover towards a funeral when the time is needed.

    My wife and I (both in our 30's) are currently paying monthly instalments for a funeral bond and will have soon completed this.

    Anyone who is significantly older can buy a funeral bond as an assurance-style product where you pay a fixed amount each month for the rest of your life (although there is usually a cut off at 90) on death payments stop and the bond is used for funeral costs. (similar to over50 plans but the benefit is funeral costs rather than a fixed lump sum).
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