Life insurance versus funeral plans


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When it comes to funeral cover, what’s best for you and your family?

When it comes to planning for the future, getting your finances in order is vital to protect your family from unexpected costs. But with so many products on the market, it’s essential to fully understand what you’re buying before you make a decision.

What is over-50s life insurance?

Over-50s life insurance, also called life cover, pays out a guaranteed cash lump sum when you die. You’ll pay a certain amount each month for a specified period and in return, your family will be given a pay-out, which can help towards living expenses or funeral costs after you’re gone.

The cost of over-50s life cover depends on how much money you want to be paid out when you die and the provider you choose.

What is a funeral plan?

With the cost of funerals rising rapidly year on year, a funeral in 2033 could cost as much as £12,000 on average . A funeral plan lets you beat these price rises by securing funereal director’s fees and services at today’s prices. You can choose the details of your funeral, such as whether you want to be buried or cremated, what type of coffin you want and if you want disbursements (such as cremation or burial fees) to be covered by the plan.

The cost of a funeral plan depends on what you want to include – for example, how many limousines you want to include, or what type of coffin you want. A funeral plan is not insurance. You are paying the funeral director fees in advance, secure for the future.

What’s the difference between life insurance and a funeral plan?

Although both life insurance and funeral plans can help your family cope with the financial pressures of losing a loved one, they are very different in how they work.

You might pay more into life insurance than eventually pays out. With many life insurance policies, the total cost of premiums you pay in ends up being more than your family receive after you’re gone.

With funeral plans, you are paying funeral director fees in advance, not paying in policy premiums. That means your family won’t end up out-of-pocket. The key part of your funeral will be covered, and, based on what type of plan you choose, there will also be an allowance for disbursements (third-party costs).

Your life insurance’s value decreases over time.The cash sum paid out from over-50s life insurance is fixed, meaning it does not increase with inflation. This means that the value of your cash sum will decrease over time. A £10,000 lump sum will be worth less in 20 years’ time than it is now. With a funeral plan, you’re beating inflation and rising costs by securing today’s prices for your family.

If you cancel an Over-50s policy, you will lose all your money. If you decide you don’t want your policy anymore, or miss a payment, you will lose everything you’ve paid in up to that point. That could be thousands of pounds. A funeral plan with Avalon is more flexible should you have a change of circumstances.

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Life insurance doesn’t let you arrange your funeral. Although the pay-out from an Over-50s plan might help your loved ones cover the cost of a funeral, a funeral plan lets you make arrangements in advance. You can choose cremation or burial, the type of coffin you want, and leave specific requests for your friends and family. It lets you have a voice about how you want to be remembered.

What to consider before buying

As with all financial products, make sure you fully understand any insurance policy and all the terms and conditions before you buy.

If you’re interested in covering the cost of your funeral, buying a funeral plan lets you beat rising prices. Not only will your loved ones have one less thing to worry about at a difficult time, they’ll know that you’re getting the send-off you would have wanted.

Compare funeral plans with Avalon to find the best plan for you.


About the author

With a Masters from the University of Bristol, Jessica Hanson has worked in the funeral sector for several years, following the latest industry trends and writing about end of life planning. Jessica has previously written as a blogger for the Huffington Post, covering topics such as death positivity, understanding grief and how funerals are changing. You can find Jessica on LinkedIn and Twitter.