Five key pieces of information you should know about your funeral plan before purchasing
23 August 2019
A quick guide to the questions you should ask before purchasing a pre-paid funeral plan.
In the past decade, the popularity of pre-paid funeral plans has soared1 as people have sought to make financial provision for their funeral services and reduce the worry of difficult funeral decisions for loved ones. However, as recent inquiries into the funeral plan market have highlighted, there are growing concerns over the way some funeral plans have been sold by providers.
Purchasing a pre-paid funeral plan can be a cost-effective way to plan for your funeral and provide peace of mind for yourself and your loved ones, but it’s important to make sure you choose the right plan for you. Here, we have put together a quick guide to the five fundamental questions you should ask before committing to purchasing a funeral plan.
1. Will my chosen funeral director service the plan?
Funeral plans are often created and sold by the funeral directing firm that will conduct the service when the time comes. However increasingly, funeral plans are sold directly by plan providers or sales agents and then offered to funeral directors who may or may not choose to accept and service them.
When purchasing a funeral plan, it’s important to know that some funeral directors only accept funeral plans from providers with which they have an existing relationship and some do not accept plans from third parties at all. This is not always made clear at the time of purchase. If you have a particular funeral director in mind for your funeral, we recommend that you speak to them directly about a pre-paid funeral plan.
2. Do I know what is and isn’t included in my funeral plan?
With some funeral plans it’s not clear as to what is and isn’t included, and what’s covered and what items may result in further payments at the time of need. The total cost of a funeral plan is usually broken down into three parts; the funeral director’s costs, the plan provider’s management fee and the third party costs, which are also known in the industry as ‘disbursements’. The disbursement allowance goes towards elements of the funeral, such as the burial or cremation and other services, which are not provided by most funeral directors themselves. With many plans, including ours, you can choose to make a contribution towards third party costs, but there may be more to pay at the time of need. With some providers, it’s not always clear at the time of purchase that this is the case.
It’s important to read the small print so that you understand what is and isn’t included.
3. How is my money secured by the funeral plan provider?
The law currently exempts funeral plan providers from regulation by the Financial Conduct Authority (FCA) if customer monies are held in either a trust fund or a “whole of life” insurance policy. Trust funds are usually separate from the funeral plan company and are not regulated.
At Ecclesiastical Planning Services, we choose to use the whole of life model, as the life insurance policies that we use are subject to regulation by the FCA. This provides exceptional financial security for customers. Every funeral plan that we provide is supported by a guaranteed whole of life assurance policy that is ring-fenced for the customer’s funeral service when it is required. The funds cannot be used for anything else for added peace of mind.
4. What administration fees and/or sales commissions am I paying for and what is the cancellation fee?
Most funeral plan providers charge administration and cancellation fees. As you would expect, some charge more than others. In fact, a recent survey found that 75% of funeral directors are aware of some plan providers retaining charges in excess of £800 from the purchase price of funeral plans2. These often include a combination of administration fees, marketing costs and sales commissions.
At Ecclesiastical Planning Services, all of our operating costs are covered by our one-off management fee. When comparing funeral plans, we recommend that you find out which of the above charges apply and how much of your pre-payment amount will be used for the funeral when the time comes.
5. What type of funeral service will I have when the time comes?
One of the most compelling reasons to purchase a pre-paid funeral plan is that it allows you to choose the type of funeral service you would like to have. Most funeral directors are extremely flexible and can offer a wide range of services. With their knowledge and expertise, they are best placed to advise on local funeral customs and choices, as well as local prices to ensure that your funeral plan is truly tailored to your needs and budget.
While many funeral directors offer set funeral plans, most can also provide personalised plans completely tailored to your individual needs. It is important to speak openly about your funeral wishes to ensure your funeral plan includes everything you would like to have in place. Putting these wishes down on paper reduces the worry for your loved ones who may otherwise be left to make the arrangements without knowing what type of funeral you wanted.
Ecclesiastical Planning Services is one of the UK’s leading funeral plan providers, building strong and lasting relationships with local funeral directors to provide a safe home for funeral plan pre-payments. To discuss your funeral wishes or request more information about pre-paid funeral plans, please contact your local funeral director.
1. Funeral Planning Authority, Funeral Plan Statistics funeralplanningauthority.co.uk/statistics/ as at August 2019.
2. Ecclesiastical Planning Services survey of 63 UK-based funeral directing firms, March 2019.