Funeral Insurance Plans
Putting plans in place to help cover the cost of a funeral can make things easier for loved ones when the time comes. How you decide to do this and the type of funeral insurance you choose will depend on your personal requirements and affordability, as there are a number of funeral planning options to consider.
What are the different types of funeral insurance?
Funeral insurance is a whole of life insurance policy in your name that pays out a cash sum when you die. You pay a monthly premium which is based on your age and you are covered after an initial period of one or two years.
There are two types of monthly funeral insurance plans to choose from:
Over 50 life insurance - provides a cash sum when you die that can be used to help pay for your funeral services, or however ever your family wishes.
Funeral cover insurance - lets you choose and pay for your actual funeral services in advance.
Although funeral planning insurance plans tend to fall into one of these two categories, the way each plan works will depend on the provider.
Funeral insurance – what are your options?
If you prefer to stick to a monthly budget, you may want to consider funeral insurance as an affordable way to help with funeral costs.
Here’s a closer look at how each of the funeral planning insurance options work:
Funeral cover insurance
Funeral cover insurance is a life insurance backed plan that gives you the option to pre-arrange the funeral services you prefer. Your monthly payments are fixed, so will never increase and your chosen services are guaranteed, regardless of how much funeral costs may rise in the future.
How does this type of funeral cover work?
A funeral cover plan lets you arrange and pay for your funeral services in advance. You simply choose the services you prefer and as long as your payments are up to date, after the first year your funeral as detailed in the plan is completely guaranteed.
The funeral cover insurance plan is safe as it is regulated by the Financial Conduct Authority and acceptance is guaranteed as long as you are a UK resident between the ages of 50 to 80.
How much does this type of funeral insurance cost?
The cost of your funeral cover insurance will depend on the type of plan you choose and your age. Once in place, your monthly premiums are fixed so will never go up
What are the pros and cons of funeral cover insurance?
Funeral cover could be a good idea if you want to stick to a monthly budget and pre-arrange your funeral.
Benefits of a funeral cover plan
- Choose the funeral services you want or a cash sum
- Cover is guaranteed, even if funeral costs rise
- You are covered for the services included in the plan after your first year
- Your monthly premiums are fixed and will never go up
- Your cover continues to grow every year
- You are immediately covered if death is as a result of an accident
- Acceptance is guaranteed, regardless of the state of your health
Important to know
- If you die during the first 12 months, you will not be covered for the services or the cash sum. Instead, the money you have paid into the plan would be refunded to your estate.
- Premiums are payable for life or until your 90th birthday
- Depending on how long you live, there is a chance you could pay more in premiums than the value of the cash sum
- If you cancel the plan or stop paying your premiums, the cover will stop but no money will be refunded
Over 50 life insurance
Over 50 life insurance is a simple and affordable way of leaving money for family when you die. The cash sum paid out is guaranteed and can be used however your family wish, although most people use this type of life insurance to help with funeral costs - hence the term funeral insurance.
How does this type of funeral insurance work?
This type of funeral insurance guarantees to pay out a fixed cash sum when you die**. You simply choose a monthly premium based on your budget and how much you would like to leave and you are covered for the full cash sum after an initial period of one or two years***.
Most over 50 life insurance plans also offer a free funeral benefit option if you want the money paid directly to a funeral director. In return you will receive a contribution towards the cost of your funeral when the time comes.
The application process is quick and straightforward as there are no medical or lifestyle questions to answer and your money is held safely in a whole of life insurance policy that is regulated by the Financial Conduct Authority.
How much does over 50 life insurance cost?
The cost of Over 50 life insurance will depend on the company you choose, your age and the amount of cover you require. Some companies also ask whether you are a smoker which will affect the cost of your cover.
For example, the Sunlife over 50 plan has cover starting from just £3.70 a month.
Your monthly premiums are fixed, so will never change although some companies offer increasing over 50 life insurance plans if you prefer to keep up with inflation.
What are the pros and cons of over 50 life insurance?
This type of funeral insurance could be a good idea if you want simple affordable life insurance that guarantees cover regardless of the state of your health. However, it is important to consider the pros and cons before deciding if over 50 life insurance is the best option for you:
Benefits of this type of funeral insurance
- Guaranteed a cash sum - as long as you pay your premiums when due**
- You are covered for the full cash sum after an initial period of 1 or 2 years***
- You are immediately covered for the full cash sum if death is as a result of an accident
- Acceptance is guaranteed with no medical or lifestyle questions to answer
- Option to add the free funeral benefit option
- Flexibility to use the money how your family wish
- Quick and easy application process with affordable premiums
- Fixed monthly premiums that never go up (unless you choose an increasing plan)
- Simple and quick claims process
Important to know
- If you die during the initial period, you will not be covered for cash sum. Instead, the money paid into the plan would be refunded to your estate.
- Premiums are payable for life or until your 95th birthday***
- As the cash sum paid out is fixed, inflation will reduce its value over time
- Depending on how long you live, there is a chance you could pay more in than the plan pays out
- If you cancel your over 50 life insurance or stop paying your premiums, your cover will stop and you won’t get any money back
- As the cash sum is typically paid to your estate, it may be subject to inheritance tax
***depending on the company you choose
What are the other alternatives to funeral insurance?
The funeral insurance options in our guide are simple, affordable, monthly insurance payment plans, designed to help with funeral costs. However, depending on your budget and requirements, there are some alternatives you may want to consider:
A prepaid funeral plan – gives you the option to arrange and pay for your funeral service in advance. You pay in one go, or with monthly instalments over a fixed number of years and the services as detailed in your plan will be provided when the time comes. For more information, read the Over50choices guide to prepaid funeral plans.
Savings – If you have sufficient funds available, you may want to put some money to one side to help with funeral costs. You will need to keep an eye on rising funeral costs if you want to ensure sufficient funds are available and make sure your family can access the money when the time comes. With this option there is also the chance that you may dip into your savings if the need arises.
Your estate – if you have property or investments, these could be used to help cover the cost of a funeral. There is a chance that the funds won’t be available immediately so your family may need to pay for the funeral first and then recoup the cost once the estate is settled.
Now you have reviewed our guide to funeral planning insurance options, you can find out more about Over 50 life insurance - with some of the UK's leading providers.
Alternatively, if you want to understand more about how the plans differ, you can see how the funeral insurance cover options compare.