Below is an article that I wrote about pre-paid funerals plans for the National Federation of Funeral Directors (NFFD), of which I am the Head of Member Services.
I have been doing some research recently as I was asked to write an article by our local radio station (who also have a magazine) about funeral plans. To help me, I wanted to look at what others had written to help me form this article. I have to say – I was shocked at what was being said by both public and some funeral professionals.
My first point in this is that yes, the funeral industry and pre-paid funeral plans can be a mystery for people. There is incorrect, misleading information, and scaremongering everywhere. Focusing on the pre-paid funeral plans side of this – there are different points to look at.
Insurance or Plan?
Many people in the public do not know when they see an advert on TV or hearing a radio ad about paying for your funeral, if this is a plan or insurance. Many do not even know the difference between them. Insurance plans are there to offer a lump sum upon death, to be used however you wish. A funeral plan is there to pay for your funeral – that’s the big difference. Speaking as a funeral director, I also get paid for the funeral either before or within a few weeks of the funeral date (depends on the company providing the plan policy). Now, insurance, is very different. Families are not getting paid until up to months after the funeral. So, this causes stress and worry to the family as the bill must be paid and also stress and worry for the funeral director who’s wondering when they will be paid. Whole life insurance plans, say like an over 50s one, could also mean that you pay more then the value of the insurance pay-out. This all depends on how long you actually live for. I have encountered this myself with people that have come in to us worried that the payments they have made to date equates to the sum assured. The insurance plan will still need to be paid every month until death or your 90th birthday.
Today I read about a Funeral Director advising people against funeral plans and towards putting the money into an ISA. Now, sounds great but, that money could be used for anything and not actually go towards the cost of the funeral. The ISA rate will undoubtable be below the inflation rate year on year for the price of a funeral, meaning the amount saved will still not cover the costs.
Now of course when funeral prices are mentioned, as we all know, the funeral directors are the ones who are down as greedy. Please let me take this opportunity to say that this is not, always, the case. When looking at the prices of funerals, it is the third party charges that change each year. Of course, some professional charges will need to change as prices increase for stock such as coffins and increases in wages (including minimum wage). When looking at pre-paid funeral plans, it should be researched just like you can with an at need funeral. That is the best advise anyone can give in my opinion, and of course that an independent funeral director may offer a better value of funeral plan (especially if they have a plan provider that lets them offer plans at their own prices, like Safe Hans Funeral Plans).
It is not all about the financial side of it when taking out a pre-paid funeral plan. I actively encourage people to write down their wishes within the application or to take away one of our Funeral Wishes leaflets. That is the other side of pre-paying: planning it was well.
Many people will say “just leave me out with the rubbish” or “why should I care what happens to me?” To anyone that truly feels that way, take out a direct cremation package then its all sorted and paid for, also you are not leaving your family to deal with the stress of paying for it. Isn’t that the other main aspect of doing all this? I have seen such a difference in families where there has been a pre-paid plan. Its been paid for, its all sorted and I know exactly what the deceased wanted because I met them, I spoke with them, I recorded it all down for them and reassured them that it was all paid for.
Yes I am biased – but I would not use a plan provider I did not trust. I know that Safe Hands allows me to sell my plans at my prices, and that’s what I want. I know that the funeral is paid for and I know that I will get that money back, plus the growth of the plan. The ONLY admin fee I will pay is the £75, and I pass that on when the plan is taken out. Who else offers this kind of service in the world of pre-paid funeral plans. Not only this, but I would never dream of asking for more money from a family when they have paid their plan in full. Now, I do understand that there are plan providers out there who have high commissions rates to sellers and then take a large admin fee so the funeral director is only left with enough to cover costs. This is not something that should be paid for by the family in my opinion, but something that needs to be tackled by everyone against these companies. Choose a plan provider that doesn’t take away from you and to people looking at taking a plan out: look at the whole of the market, and never go too low if not directly from a funeral director.