It’s highly likely that when you hear the term ‘funeral plan’ your mind is automatically drawn to the image of an elderly man or woman. And you wouldn’t be far wrong.

Inherently, funeral plans are targeted towards those most likely to be focusing on their death and as a result, the target market has become those in latter life.

Perhaps not quite the elderly man and woman previously mentioned, but the average age of those purchasing prepaid funeral plans is between 55-65. Dependant on your age, you may see yourself as being far off this demographic and therefore not considering the benefits a funeral plan could hold for you.

But actually taking out a funeral plan at a younger age could actually save you more money in the long run than if you were to take one out in later life.

The average cost of a funeral (£8,905) is now 122% higher than it was 15 years ago and that only covers the Funeral Directors Costs. The total cost of dying now sits at an average of £9,204.

These increases show no signs of slowing down making it easy to imagine just how much they are likely to have risen in another 10-15 years (and if you’re only 30, you will still be 10 years off the lower end of the key demographic).

Avoid inflated costs

The main benefit of a funeral plan is that it allows you to cover the funeral directors costs associated with your future funeral at today’s prices. Therefore allowing you to lock in the current average funeral director cost rather than paying the further inflated rate in years to come.

It is predicted that by 2023, the average cost of a funeral will have risen to an average of £5,120. If you were to have taken out a plan in 2018, you would have only paid the average going rate of £4,271 (or equivalent based on the plan you select).

Paying off the plan

There are three main payment options associated with funeral plans; one off payment, 12 interest-free monthly payments and a low cost installment plan.

Whilst the one off payment and 12 monthly interest-free payment do not require you to pay more than the plan is worth, it does involve paying significantly large sums.

For example, even a 12 month plan is likely to cost several hundred per month to cover the overall cost of the plan.

Whereas a low cost installment plan allows you to pay much more manageable amounts on a monthly basis and even with the interest accrued, is still likely to have cost you less than the cost of a funeral at the time of death.

For example, over the last 10 years we have seen an increase of 67.56%, if this rate were to continue the cost of a funeral in a further 10 years time could be £7,132.57. Even paying £41 per month on a low cost installment plan for 10 years would only result in a total payment of £4,920, saving you a total of £2,212.57.

The younger you are, the longer the instalment plan you will be able to receive and the lower the monthly outgoing.

No expiration

Unlike life insurance, a funeral plan does not have an expiry date, therefore, even if you were to die 20, 30 or even 40 years after arranging your plan, you would still benefit from the reduced rates associated with funerals at the time you took out the plan.

Therefore, the sooner you take out a funeral plan, the better rates you are likely to benefit from and regardless of when in the future you die, your funeral director costs will be covered.

State your preferences

Not only about covering the costs of a funeral, having in place a funeral plan also allows you to specify details about your wishes with regards to your ceremony.

For example, choosing between a burial and cremation, choosing songs and potentially even determining where you would like the ceremony to be held.

Taking out a funeral plan at a young age means that you can make these specifications early on, avoiding focusing on such details at an older age when death is likely to be much more imminent.

Equally, specifying your details also doesn’t have with it an expiration date and is not required upon arrangement of the funeral plan. Therefore, if you feel these are decisions you would prefer to put off until a later date, this is possible.

But why does it matter…

At a young age, it can be tempting to put off tasks such as arranging your funeral until it ‘really matters’.

The largest benefit with regards to a funeral plan is the money which it can save you in the long run.

It can easy to question why this is going to be so important, firstly, when it is so far away and secondly, when you will no longer be around when the investment is actually of use.

Unfortunately, it is never too soon to think of the future financial well-being of our loved ones.

Due to not having in place the proper precautions, loved ones of the deceased are often held responsible for covering the cost of the funeral. As this average cost increases, so does the potential financial strain it can bring to those you love the most.

In many instances, people had to turn to loans, credit cards and even selling personal belongings to cover the funeral cost of those who had passed.

Having in place a funeral plan can alleviate this burden at an already distressing time for your loved ones.

Benefits Summary

As you can see, there are a number of reasons why taking a funeral plan out at a younger age could be beneficial;

• Avoid the rising cost of funerals (currently 122% over the past 15 years)
• Taking out a low cost instalment plan can allow you to make more manageable monthly payments whilst still paying less than the going rate at time of death
• The sooner you take out a plan, the longer instalment plan you will be approved for
• The plan does not expire meaning that regardless of the age you are when you take out the plan, your funeral directors costs will be covered when you die at a cost which will not increase over time
• State your preferences with regards to your funeral service, avoiding the need to do them at an already difficult time; or make them whenever suits you in the future
• Most importantly, ensure the financial future of your family is secured and they are not left with the burden of having to cover the cost of your funeral at an already difficult time

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