A funeral plan is not an impulse buy; paying in advance for something that we don’t expect to have to use for years is not an everyday decision. That said, funeral plans are becoming more popular, with 18% of survey respondents to the SunLife Cost of Dying Report 2023 opting to plan ahead with a pre-paid funeral plan in 2022. Here’s some reasons why buying a pre-paid funeral plan is a smart purchasing decision.
1. Financial planning
Facing unexpected funeral expenses is upsetting for family members already dealing with the distress of a bereavement.
The overall cost of organising a basic funeral and a wake, plus estate administration fees, is now £9,200 according to the SunLife Cost of Dying Report 2023. The insurer’s annual look at funeral trends reports that less than 70% of people make provisions to pay for their funeral, and less than 60% of those people put enough aside to cover the whole cost of their funeral.
To help with funeral costs, a funeral plan lets you pre-pay the funeral director services included in your plan. As well as the cost of the funeral director services, there are other funeral costs you need to think about. Referred to as third party costs, these are for other essential services such as cremation or burial fees, and the minister or officiant’s fee to perform the service. These are outside of your funeral director’s control but will need to be paid for at the time of the funeral. Most plans include an allowance for third party costs. The value of any allowance in your plan may grow over time. However, there may be more to pay for third party costs if they exceed the allowance in your plan at the time of the funeral.
2. Price protection
According to SunLife’s ongoing research, funeral costs have risen by 116% since 2004, with the average cost of a basic funeral* increasing from £1,835 in 2004 to £3,953 in 2022. If costs continue to rise as they have for most of that 18 year period, predictions show that the cost of a basic funeral could be more than £5,000 in 2027.
One of the biggest reasons for buying a funeral plan is that it fixes the cost of the funeral director's services included within the plan at today's prices.
3. Personal wishes
Although many of us have very clear ideas about what kind of funeral we’d like, very few of us share those ideas. SunLife says almost 20% of the people who have organised funerals didn’t know any of their loved one’s funeral wishes. This ranged from not knowing how people want their social media accounts to be handled, to whether they want to be cremated or buried.
Pre-planning your funeral gives you the chance to tell your family how you want things to be, from cremation or burial to your choice of music, readings and flowers. It also allows you to set the budget, avoiding the pressure some families feel to spend more to ‘do right’ by the person they have lost.
And, with death still a taboo topic in our society, we struggle to talk openly about it. The conversation may be easier if it’s related to some practical steps you’re taking. Buying a funeral plan is an ideal opportunity to have difficult conversations about your end of life wishes.
4. Reducing upset
Losing a loved one is an upsetting and emotional time, and planning a funeral can add to the grief. By pre-planning your funeral, you can lift some of the strain of decision making around funeral arrangements and finances. With the pressure of funeral logistics removed, family members will be free to grieve in their own way.
The decision to purchase a pre-paid funeral plan is a personal one with many motivations, but overall, people who buy funeral plans are looking to help protect their loved ones financially and guard against potential cost increases in the funeral director services included in their plan. They are also looking for peace of mind for themselves and to avoid added stress for their loved ones at a very difficult time.
