Pre-paid funeral plans: So you have to specify the funeral directors?

collinsca

Hi

My wife and I are considering starting up pre-paid funeral plans.
We are both in our late 40s.

My initial research showed that you had to be over 50 to start a plan, however i found a company called 'Ecclesiastical' who stipulates 'over 18s'.

Ecclesiastical have said that we would need to specify the funeral directors we would want to use up front.

My question is whether this is specific to this company or if other pre-paid funeral companies allow you to decide at a future date?


Many thanks

born_again

Why not put the same amount away each month in a savings account instead? 

collinsca

born_again said:

Why not put the same amount away each month in a savings account instead? 

Thanks for suggestion. The pre-paid funeral approach protects you from the ever rising funeral costs

Spendless

born_again said:

Why not put the same amount away each month in a savings account instead? 

Because if you go into a care home, any money in the bank is taken into account till you get to a certain amount.  You can't ring-fence some for your funeral but you can buy a funeral plan and it's not classed as DOA. You buy at 'tomorrows' prices but then that is in place regardless for as long as you live (with the exception of some costs). Eg my Mum bought one for my Nan - it cost £5,000. If Nan had died the following week, Mum would have paid over the odds for the funeral - which at that time was approx £3.5/4k. Instead  Nan lived for another 8 years by which time the funeral she had would have cost £7k in todays money. 

OP- Why don't you go and talk to some independent FD in your area, see what they suggest. 

born_again

Good point, but for someone in their 40's & most companies seem to require you to be 50.

tooldle

Try the coop. They offer funeral bond (paid at today’s price). I’ve not long used my mum’s bond to pay for her funeral. Bond was bought in 1995.

collinsca

tooldle said:

Try the coop. They offer funeral bond (paid at today’s price). I’ve not long used my mum’s bond to pay for her funeral. Bond was bought in 1995.

Thanks - i cant seen anything online about a "funeral bond" - although they do have varying plans...

I have found 2 different co-op companies on trust-pilot and so i am nervous about co-op. Maybe i dont understand the company structure!?


one which is great:
The Co-operative Funeralcare - Southern Co-op Reviews | Read Customer Service Reviews of funeralcare.co.uk (trustpilot.com)
and one which isn't:
Co-op Funeralcare Reviews | Read Customer Service Reviews of coop.co.uk/funeralcare (trustpilot.com)

I now see first one is "co-operative", second is "co-op" - are these different companies?

Mojisola

My parents used AgeUK and they had contracts with a local FD.  The company they used changed between buying the plans and needing to use the plans but there wouldn't have been any option but the one they named.

Fortunately, the service from the FD was very good.

Savvy_Sue

I think that some plans would tie you into a 'chain', eg a Coop plan would tie you to a Coop FD, enabling you to use a convenient one even if you'd moved around. 

But I would expect the plan to require a particular FD, yes, because they've got to base what's to be provided in the future on something, and each FD will do things slightly differently and have different plans available. 

collinsca

JamesRobinson48 said:

The Coop Funeral Plan T&Cs state that any UK resident over 18 can buy a Coop funeral plan. The T&Cs also say that one of the Coop's own FDs is to be used for the funeral.

IMHO there are a number of drawbacks in the Coop's T&Cs (doubtless also typically of other similar funeral plans).

* As the prepaid plan does not include the cost of buying a burial plot, or any grave marker such as a headstone, your estate or your heirs will need to find the money for those if you have chosen the burial option.

* The plan does not cover additional costs that would be incurred if your place of death is distant from that of your burial.  Also, the plan won't cover any costs if your funeral takes place outside the UK, for example if you die on holiday abroad and are cremated over there.

* Coop will deduct an administration fee of up to 6% of all the money that you pay into the plan, to cover its marketing costs (e.g. the commission it pays to the sales agent who sold you the plan).

* Coop buys an insurance policy to protect you against the risk of its own bankruptcy. The cost of that insurance policy is obviously factored into the cost of the funeral plan that you paid.  And in that bankruptcy scenario, there is no guarantee that the insurance proceeds would be sufficient to pay for the funeral that you thought you had purchased.  For example, if future inflation in funeral costs exceeds the financial return earned by the insurance company on the money you paid in. 

* Coop indicates that there may be a problem with your plan if you change address without telling them. So if you lose mental capacity in old age, and are moved to a care home, you might forget to tell Coop that you moved and your heirs might have difficulty claiming on the plan.

* The T&Cs make clear that nobody other than yourself is entitled to bring any claim against Coop under the funeral plan. So for example, suppose after your death your family believe that Coop failed to honour the agreement or are unhappy with how the funeral was conducted, they would have no right to claim financial compensation because they were never party to the funeral plan contract in the first place.  Only yourself would have the right to sue Coop ... but for obvious reasons that would be impossible!

To me the product seems unsuitable for someone your age, who might live another 40 or 50 years, unless the person happens to have severely impaired life expectancy.  Given that length of time, you don't know if Coop will still be in the funeral business then. The close family members who you told today about the funeral plan might also have passed by then, so the plan's existence might even be forgotten. You assume that buying the plan today will protect your estate or your heirs against future funeral price inflation, but there's really no guarantee of that so far into the future. The T&Cs contain various exclusions and potential pitfalls. For someone so very young, I feel the comfort you are drawing from such a plan is illusory, and that you may be better advised to invest the money instead, thus empowering your heirs to arrange and pay for your funeral when the time comes.

Thanks for this very detailed response.

Noted on the T&Cs - i will have to read them in more detail.

We have no heirs, so it is just the 2 of us, and after a number of family bereavements recently we are keen to make sure each other will not have that financial worry when the time comes.

WYSPECIAL

collinsca said:

tooldle said:

Try the coop. They offer funeral bond (paid at today’s price). I’ve not long used my mum’s bond to pay for her funeral. Bond was bought in 1995.

Thanks - i cant seen anything online about a "funeral bond" - although they do have varying plans...

I have found 2 different co-op companies on trust-pilot and so i am nervous about co-op. Maybe i dont understand the company structure!?


one which is great:
The Co-operative Funeralcare - Southern Co-op Reviews | Read Customer Service Reviews of funeralcare.co.uk (trustpilot.com)
and one which isn't:
Co-op Funeralcare Reviews | Read Customer Service Reviews of coop.co.uk/funeralcare (trustpilot.com)

I now see first one is "co-operative", second is "co-op" - are these different companies?

Yes, they are completely different companies.