Pre-paid funeral plans (Under 50)

Mojisola

collinsca said:

However thats what i interpreted from this site... regarding what i have put in bold, this is what is says here:
https://www.moneysavingexpert.com/family/death-plan/ under 'Weigh up whether an over-50s' plan is really worth it' it says.. "Premiums are payable for life and you could pay more in than is paid out on death."
"Because the amount it pays out is fixed, if you live a long time you may end up paying more for the plan than you'd ever receive."
OR have i misinterpreted this!?

You have.

Over-50s plans are not funeral plans.  They are promoted as providing a lump sum which can be used to pay for a funeral but many people end up paying more into them than they get out.

Funeral plans have a fixed price.

jimpwarsop

McKneff said:

10 years ago my hubby and I paid £6k for two funerals. This covered all the necessaries.  All planned
Nothing more to pay.  Unless there are extras ordered at the time. 
We don't even think about it now 

And if the funeral company goes bust ?

collinsca

McKneff said:

10 years ago my hubby and I paid £6k for two funerals. This covered all the necessaries.  All planned
Nothing more to pay.  Unless there are extras ordered at the time. 
We don't even think about it now 

What company did you use may i ask and what were the plans called?

collinsca

Mojisola said:

collinsca said:

However thats what i interpreted from this site... regarding what i have put in bold, this is what is says here:
https://www.moneysavingexpert.com/family/death-plan/ under 'Weigh up whether an over-50s' plan is really worth it' it says.. "Premiums are payable for life and you could pay more in than is paid out on death."
"Because the amount it pays out is fixed, if you live a long time you may end up paying more for the plan than you'd ever receive."
OR have i misinterpreted this!?

You have.

Over-50s plans are not funeral plans.  They are promoted as providing a lump sum which can be used to pay for a funeral but many people end up paying more into them than they get out.

Funeral plans have a fixed price.

understood, thanks!

Spendless

collinsca said:

Spendless said:

My Mum took one out on my Nan 6 years ago . I'm a bit confused by your 'you pay forevermore' as this wasn't what they did. It certainly cost at 'tomorrow's prices' but since Nan has lived 6 years since it was bought , a funeral today would be pretty much in line with what the policy cost (£5k). There are some things it doesn't cover, as explained in one of your links, but there's no ongoing fee they pay.  

As per other responses, you pay in forever. If you found a plan that didnt do this then it would be great to know what that was. thanks

My Mum went to a funeral directors and paid around £5K for a funeral plan. This was 6 years ago. Back then a funeral probably didn't cost £5K, so the price was at 'tomorrow's price' My Nan is still alive (97 next month) as and when she dies this plan that cost £5K will cover the majority of the costs - even if she lives to be the oldest woman on earth  and the average funeral then costs a lot more than the £5K paid a few years back.  There's been no more money to pay other than that £5K.  There will be some things it doesn't include that will be a separate cost, eg my Grandad who died 21 years ago, my Nan kept his ages, at the point Nan goes my Mum wishes them to be put together with a small stone with their names. This is not covered by the £5K paid out  

Spendless

jimpwarsop said:

McKneff said:

10 years ago my hubby and I paid £6k for two funerals. This covered all the necessaries.  All planned
Nothing more to pay.  Unless there are extras ordered at the time. 
We don't even think about it now 

And if the funeral company goes bust ?

https://www.prepaidfuneralreview.co.uk/funeral-director-goes-out-of-business-what-happens-to-my-prepaid-plan/#:~:text=If the funeral director goes,quite possibly the same one.

jimpwarsop

Spendless said:

And if the funeral company goes bust ?

https://www.prepaidfuneralreview.co.uk/funeral-director-goes-out-of-business-what-happens-to-my-prepaid-plan/#:~:text=If the funeral director goes,quite possibly the same one.

Suggesting that a plan owner would get an amount of money that may, or may not, cover the cost of a funeral.

If funeral cost increase more than the value of the plan who makes up the shortfall, a funeral director ?

Spendless

jimpwarsop said:

Spendless said:

And if the funeral company goes bust ?

https://www.prepaidfuneralreview.co.uk/funeral-director-goes-out-of-business-what-happens-to-my-prepaid-plan/#:~:text=If the funeral director goes,quite possibly the same one.

Suggesting that a plan owner would get an amount of money that may, or may not, cover the cost of a funeral.

If funeral cost increase more than the value of the plan who makes up the shortfall, a funeral director ?

That's why you pay at 'tomorrow's prices; (something I've mentioned in my previous posts on here but I'll explain again as maybe you missed it) 6 years ago when my Mum purchased a funeral plan for my Nan she paid £5K for it. At this time a funeral in our area did NOT cost £5k, it was cheaper. Exact cost back in 2015 unknown but let's say for arguments'  sake it cost £4K. If Nan had died shortly after the plan was purchased, then the 'funeral director' would have 'won' because the funeral would have cost less than the policy purchased and there'd have been no refund on the surplus.. As Nan is still alive then if she died any time soon her funeral expenses would break even. If she lives another 10 years say and the average cost of a funeral by then is £7K where we live, then it will have been a good investment and no we wouldn't need to put another £2K towards it. 

Elmer_BeFuddled

Age UK funeral plan here. 3 months to go on payments (over 12 months, interest free). Gives an option of funeral directors. Co-op is another that springs to mind.

Malthusian

jimpwarsop said:

Suggesting that a plan owner would get an amount of money that may, or may not, cover the cost of a funeral.

If funeral cost increase more than the value of the plan who makes up the shortfall, a funeral director ?

The people who bought funeral plans and die not long afterwards. The difference between what they paid for the funeral plan and the cost of their funeral is pocketed by the funeral plan scheme, who uses that money to pay for those who live a long time and paid less than their funeral costs. That's how insurance works.