London (PRWEB UK) 27 March 2014
As price increases continue to exceed inflation on an annual basis, the way people think about paying for a funeral has had to change. With the average cost of a funeral at more than £3,400, an increase of 80% since 2004, it's little wonder that a growing number of people are turning to pre-paid funeral plans as a way to ease the financial pressure from the family when the inevitable happens.
Ahead of further price increases by major funeral plan providers, over 50s personal finance website Over50choices has released its 10 step guide to choosing the best prepaid funeral plans, aimed at guiding people through the process of choosing and buying a funeral plan and most importantly, avoiding looming price increases.
Step 1 – Decide on what’s important to you
All funeral plans guarantee to cover the cost of the funeral director’s services; a number of plans also pay a contribution of around £1,000 towards third party costs, also known as disbursements which includes the minister’s and doctor’s fees as well as cremation or burial charges. A small number of companies do guarantee to cover these additional costs but this is often reflected in the price so you need to think about what is important to you.
Step 2 – Choose your level of service
Providers typically offer three levels of service; simple, standard and superior. The main differences between the three are the number of limousines included for the family and the quality of the coffin.
Some companies also offer a basic level of service but this doesn’t include an allowance for third party costs.
Step 3 – Look at your payment options and decide on your budget
Depending on the funeral plan provider, you have 3 payment options to choose from.
- Single payment in full – plans range from £3,000 to £4,000 (basic plans cost around £2,000)
- Monthly instalments (between 12 and 60 months) – this can be arranged over a fixed number of months. Instalments exceeding 12 months usually include additional administration fees
- Fixed monthly payments – you pay a lower monthly premium for life or until your 90th birthday which is based on your age and level of service required. Payments start from £17 a month and you are covered for your full funeral service after an initial period of between 6 months to 2 years.
Step 4 – Future proof your funeral plan
Be sure your plan allows you the flexibility you need and if necessary, the ability to change. If you think you may move in years to come, check you can also move to another funeral director and if there are any associated costs.
Step 5 – Think about your family’s wishes
Most families are relieved by the emotional and financial support a funeral plan can bring; not having to make difficult decisions or worry about funeral costs however some may wish to add their own personal touches as a special tribute. If you think this may apply to your family, it could be worth checking whether the funeral plan can be enhanced in any way.
Step 6 – Shop around
Compare, compare, compare. This is an important decision so you want to be sure of choosing the best funeral plan at the right price. The cheapest funeral plans may not always be the best option so do your homework and compare funeral plans before you buy.
Step 7 – Read our reviews
To help you see what is on offer, we have written a series of funeral plan reviews, highlighting the pros and cons of the leading providers.
Step 8 – Be secure
Depending on your chosen plan, your money will either be placed in a trust fund, regulated in compliance with the Financial Services & Markets Act 2001, or a life insurance plan, regulated by the Financial Conduct Authority (FCA).
It is also worth checking that the funeral plan provider is a member of the Funeral Planning Authority (FPA) and either the National Association of Funeral Directors (NAFD) or the National Society of Allied and Independent Funeral Directors (SAIF).
Step 9 – Look at the perks
Some companies offer a gift as a thank you for choosing one of their plans. For example Over50choices provide our customers with either a free Will worth £120 or gift vouchers.
Step 10 – Act now
The majority of companies have already increased the price of their funeral plans this year however there are a handful left that have yet to make the move. Golden Charter has announced price increases from the 1st April so to save up to £309, act now!
For more information or to compare funeral plans, visit Over50choices.