Most of the UK’s over 50 population haven’t made financial provisions for their funeral.
Yet, the interest in funeral plans and over 50s plans has risen substantially in the last two years due to the Covid-19 pandemic.
Some people are reluctant to take out cover during this time because they’re unsure of how Covid-19 has affected the application process and whether they’ll be covered if they caught the virus.
This is a common misconception and in fact, the proposition of funeral plans and over 50s plans hasn’t changed at all since before the pandemic.
Your clients can be reassured that if they want to protect their loved ones from unexpected funeral costs in the future, then a funeral plan or an over 50s plan should be considered as affordable ways to achieve this.
Either option can be taken out to help alleviate financial difficulty for their family after they’re gone. Especially as funeral costs have risen 121% since 2004 and the average cost of dying has reached an enormous £8,864 in the UK*.
Arranging adequate cover for their funeral should be an essential part of your client’s end of life financial planning.
Whether a funeral plan or an over 50s plan is right for them will depend on a variety of factors, including their age, budget and, quite simply, personal preference.
This guide, written by award-winning broker Reassured, explores the key differences between the two products and the main considerations for your client.
| Funeral plan | Over 50s plan |
| Pays out to cover the cost of funeral services included in the plan when client dies | Pays out a cash lump sum to beneficiaries when client dies (after the 12 or 24 month waiting period) |
| Funds go straight to the nominated funeral director to pay for the funeral | Funds can be used towards funeral costs, or however loved ones wish |
| Choice of payment options (pay in full or in monthly instalments) | Requires fixed monthly premium payments (until age 90 or until death) |
| Client can choose a plan based on what they want it to include and their budget | Pay out amount (sum assured) will depend on the client’s age and their budget |
| Guarantees acceptance (age limits may apply depending on the provider) | Guarantees acceptance (for ages 50 – 80, sometimes 85) |
| Client can arrange a plan without providing any medical information | Client can arrange a plan without providing any medical information. However, their smoking status could affect their premium |
| Client can cancel the plan and receive money back (minus cancellation fee) | If client cancels the plan then they’ll lose their premiums |
| Automatically exempt from inheritance tax (IHT) and probate | Can add on a funeral benefit option so pay out goes straight to a funeral director (plus receive contribution towards funeral costs) |
What is a funeral plan?
A prepaid funeral plan is a contractual agreement between a client and a funeral services provider.
It allows the client to pay for their chosen funeral services in advance and at today’s price (avoiding future inflation).
Many people take out a funeral plan because it provides them with peace of mind knowing that their loved ones won’t run into money troubles as a result of paying unexpected funeral fees.
It covers the main goods and services required for a send-off, including funeral director services, a cremation or burial, a hearse, and a coffin.
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