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What Is A Prepaid Funeral Plan?

According to bereavement counsellors, Funeral Zone, the average cost of a funeral in the UK as at the 16th of May 2016 was £4,110 – the actual price, of course, depending on the particular arrangements chosen, the circumstances of the death, and the part of the country in which the funeral is to take place.

Whatever way you look at it, however, £4,110 is considerably more expensive than the maximum £700 allowance which the government makes available to those on benefits and who cannot otherwise afford the expense of a funeral.

You might find the prospect of leaving your relatives and loved ones with a bill of more than £4,000 on your passing to be an unacceptable burden. So what might you do?

Advance arrangements with your local funeral directors

One option is to make the arrangements you want well in advance of the event itself. You are likely to find that any reputable and accredited funeral director is likely to offer this service.

It has the advantage of making sure that, since you are making the arrangements, your funeral is likely to go in just the way you want it to. By making those arrangements and also paying for them in advance, you also have the opportunity of beating any further increase in the cost of your funeral. By paying at today’s prices, you may avoid the almost inevitable effects of inflation in the future.

Protected payments

The major drawback of putting everything, including the amount you have paid, into the hands of your local funeral director is the risk of the firm becoming insolvent in the future and going out of business. This carries with it the risk of your losing all you have paid over.

Fortunately, there is a solution to this dilemma and this comes in the shape of a prepaid funeral plan.

It works in a very similar way: you make all the arrangements you wish with your local funeral director and pay for those arrangements in advance. In this case, however, the payment is made to an authorised national provider of prepaid funeral plans.

Using this solution means that anything you have paid out is adequately protected. This protection may be provided by one of two ways:

  • the funds are put into trust and remain safely available until they are needed; or
  • the money is used to purchase a whole of life insurance policy, which pays out an assured cash benefit upon your death.

Either way, therefore, the payment you have made is safely protected and is available to pay the funeral director when the time comes.

If the funeral director you chose when first making the arrangements goes out of business during the interim, your funds are still available for payment to any alternative firm of funeral directors you may care to nominate.

A funeral plan may give you the security and peace of mind in knowing that the burden of financing your final wishes does not fall to your surviving family and loved ones, but has already been taken care of through your own foresight and forward planning.

Peter Christopher

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