Monthly funeral plans could offer you an affordable way to spread the cost of your funeral. The monthly direct debit payments are fixed so will never increase. And once you’ve paid into the plan for 1 or 2 years*, you are covered for the services included, even if you haven’t completed the payments.
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How can you pay monthly for a funeral plan?
You can pay monthly for a funeral plan one of two ways:
- Trust based monthly instalment funeral plan
- Life insurance based monthly instalment funeral plan
Trust based monthly instalment funeral plans
With a trust based monthly funeral plan, you can spread your payments for your chosen services over a specific number of years – usually 1 to 20** depending on your age and affordability. Some companies have an age threshold (typically 80 or 85) by which time your payments must be complete, which may limit the options available to you.
Most UK funeral plan providers let you pay over 12 months at no extra cost. Any instalment option longer than 12 months will incur additional administration fees.
These fees vary by provider and some companies also charge a deposit. So, it could be worth considering the total cost of your plan once fully paid to fully understand how monthly funeral plans compare.
You are covered for the services included in the plan once you have paid your premiums for an initial period which is typically 1 or 2 years*, known as a moratorium. If you were to die after this period but before you have completed your payments, the services as detailed in your plan would be provided with nothing more to pay.
Life insurance based monthly instalment funeral plans
With a life insurance based pay monthly funeral plan, your money is paid into a life insurance policy. Your application is guaranteed to be accepted if you live in the UK and are between the ages of 50 to either 75 or 80** and you are covered for your funeral services after an initial period of 1 or 2 years*.
Your monthly premium is based on your age and is payable either for life, or until you are 90**. The amount you pay monthly with this type of funeral insurance is typically lower compared to a trust based monthly payment plan. However, because you pay for life or until you are 90, there is a chance you could pay more in monthly premiums than cost of your funeral service. It all depends on how long you live.
How else can you pay monthly for a funeral?
Depending on your budget you may also want to consider an over 50 life insurance plan. Premiums start from as little as £4 a month and you will receive a cash sum when you die that can help towards paying for a funeral – the main difference is that you are not pre-arranging your funeral but instead, providing money that will help your family when you die. Money they could choose to put towards funeral costs. As the cash sum paid out is fixed, inflation will reduce its value over time.
Get an over 50 life insurance quote from £4 a month
How much does a funeral plan cost per month?
The cost of pay monthly funeral plans will depend on the services included, your preferred payment option, over how many years you pay your monthly payments and in some cases your age.
With a trust based monthly funeral plan, you can easily work out how much the plan will cost you in total. You just need to multiply your monthly premium by the number of years your instalments will run for and add any deposit required.
A life insurance based monthly funeral plan is a little trickier as the total cost will depend on how long you live.
What happens if you die before completing your monthly payments?
If you die after the initial period of 1 or 2 years* but before you have completed your monthly payments, your chosen funeral services will be provided and your family will not be asked to make up the outstanding balance.
If you die within the initial period, the services wouldn’t be provided but your money would be refunded.
Is your money secure in a monthly payment plan?
Funeral plans come under the regulation of the Financial Conduct Authority, the UK’s regulatory body for financial services. Companies must be authorised and adhere to the FCA’s rules and principles that require customer’s money to be held responsibly.
*Depends on the plan provider. Some plan providers have a moratorium period of 1 year whilst others have a 2 year waiting period.
**depending on the plan provider
Please note: The material on this page is for general information only and does not constitute advice on funeral plans. Over50choices is an independent company and regulated by the FCA for insurance products only. We are not endorsing or recommending the products of any advertisements on this page.