Funeral Insurance vs Prepaid Funeral Plans - The Best Protection Guidance Detail Explained In Compare Funeral Plans UK's New Later Life Planning Guide
(PRWEB UK) 11 August 2015 -- Planning ahead is always wise for those who wish to protect their loved ones against the costs of a funeral. So, there are many who will opt for whole life insurance or standard funeral insurance. Unfortunately, these are not the same type of policies as a prepaid funeral plan. There are some notable difference between the two and in turn, these differences can eventually have a massive impact upon the future financial obligations that need to be met. To appreciate why a prepaid funeral plan is often the best option, let us take a look at some of the shortfalls of funeral and life insurance.
The Problem with Inflation
Many consumers are familiar with inflation. In essence, this signifies the value of the pound falling over time. Inflation equates to paying more for the same goods or services than would have been necessary in the past. Inflation is frequently not taken into account with life insurance or funeral insurance plans. In other words, the funeral prices of today may not be covered tomorrow. The end result will be loved ones having to make up the difference in terms of out-of-pocket costs. This is even more of a concern should one eventually pass away decades into the future. Prepaid funeral plans guarantee to fix the cost of a funeral at today's prices.
Probate Issues
Another common concern with insurance policies is that they will be subject to probate delays. The receipt of legal documentation may take weeks or even months to process. Claims can be difficult to resolve and once again, this leaves the proverbial “ball” in the court of the family until a payout is given. Should funds already be tight, the costs of the funeral will need to be paid from any existing (or non-existing) funds. Prepaid funeral plans provide a lump sum which is instantly made available direct to the local funeral director at the time of need. The family will know that the money is available and therefore, planning is simple; they can instead focus upon arranging family matters and take the time to dwell upon fond memories and share stories together whilst they remember together with fondness.
Variable Versus Fixed Interest Rates
Many whole life insurance plans will provide the policyholder with variable interest rates. Why can this be dangerous? A variable rate indicates that the amount of interest paid may go up or down depending upon the economy and the decisions made by the Bank of England. So, there could be times when these rates rise dramatically and the policyholder is forced to pay more out-of-pocket costs. Note that these rates will do nothing to increase coverage levels. On the contrary, prepaid funeral plans have fixed rates that are set at the beginning of the contract agreement. These rates will never rise so the individual and the family both know how much their premiums will be each month. For pensioners and those on a fixed income, this benefit cannot be overlooked and if the beneficiary passes before the contract is fully paid, then all that will be required is the balance of the plan outstanding, so any increases in costs will have been avoided by locking in the price at the outset.
Personal Choices
Another drawback of funeral insurance and life insurance is that these policies are merely concerned with providing financial cover. There is little (if any) leeway in terms of personal funeral choices. Some plans will not accommodate cremations, local funeral directors, green burials or the ability to include other amenities such as catering. Once again, this can be quite frustrating. Choices will obviously be limited and in some cases, the wishes of the recently departed will need to be modified. Prepaid funeral plans provide levels of flexibility that are simply not possible with standard insurance packages. Therefore, all parties can determine the exact type of services that are required and fully detail their requirements right from the start.
Personalisation
Planning for a funeral can be a difficult topic to address. In most cases, the family is not entirely aware of how the process should begin. As opposed to a life insurance provider, companies which supply prepaid funeral plans specialise in this field and this field alone. In other words, they are experts in their profession. They aim to develop personalised relationships with their clients and they tend to be much more knowledgeable. So, higher levels of clarity and insight can be enjoyed while the customer will feel that his or her discrete needs are being catered to.
Medical Examinations and Age Limits
It is very common for a life or funeral insurance provider to require the applicant supply a detailed medical history. Should he or she be suffering from a pre-existing condition, the entire process could be halted and the insurance package denied. This is actually quite ironic, for it is those that are ill who need this cover the most. Many insurance providers simply do not want to take the risk of a high payout should the policyholder pass away soon after their plan is approved. On the contrary, acceptance for prepaid funeral plans is guaranteed and the plan provider will not ask for any type of medical history and in some cases, plans can be taken out from the age of 18, however this is very rarely the case as people tend to give this type of arrangement consideration once they have dependents who become reliant upon them.
The Lump Sum
Let us also recall that a final benefit of any prepaid funeral plan is that it can be paid out in an entire lump sum, but there are low cost monthly premium options available, but this is entirely at the decision of the applicant. This is not the case with an insurance policy, which always requires such timely payments. Such an option is ideal for those who may be currently working and have the liquidity to do so. Once the customer is on a limited income upon retirement, meeting such monthly obligations can prove to be much more challenging.
It is clear to see that there are a number of benefits associated with prepaid funeral plans that do not exist with a standard insurance policy. Still, it is always wise to compare best prepaid funeral plans and prices to ensure that the most competitive rates are secured and understand which are the best providers. Such important decisions should never be left to chance in an age when the costs of nearly every service are constantly increasing, with the dailymail.co.uk reporting that on average, the price of a typical funeral, including non-discretionary fees and a burial or cremation, is £3,456 and according to the Sun Life cost of dying report issued in October 2014, we can expect average of funeral costs to be £4,489 by 2019.
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Mark Leaper, Compare Funeral Plans UK, http://www.comparefuneralplansuk.co.uk, +44 8001934080, [email protected]
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