Rental car insurance. Funeral cover insurance -

Whether you're planning to pay for a funeral through life insurance, a funeral plan or your estate, read our guide for more information. Funeral insurance.

In order to save your family the trouble and strife, you may want to think about ensuring your life insurance policy includes enough cover to pay for your final send-off.

After all, it's not just the cost of living that can rocket with inflation. Dying can be very expensive, too.

According to the Guardian, in June 2014 the average cost of a funeral including extras such as flowers, venue hire and catering was about £5,500, and around one in five families found they had a shortfall when it came to paying.

It really makes sense to plan as soon as possible. The more you think about your funeral, the less your loved ones will have to when the time comes.

What are your options?

There are a few different options when thinking about the cost of your funeral. One is to factor it into your life insurance policy by making sure your cover includes a sufficient sum to meet the costs.

Of course, that's not much use if you've opted for term insurance and survive longer than your policy, so think about the following:

Life plans

As an alternative to term insurance you may want to consider a whole of life insurance policy, which would pay out an agreed amount on your death.

Such policies can be taken out from the age of 16, but the most common type are a specific sort of product known as over 50s lifelong protection (regularly and inaccurately referred to as 'over 50s life insurance'; you should be aware that there are a variety of other life insurance options for older people available).

Some people take over-50s policies out simply to help their family with the cost of their funeral; while this can be an option, you should be aware that there are a number of downsides to these products.

If you're not entirely sure how much cover you need or what the best insurance is for you, it's worth speaking to an impartial adviser from our partner Assured Futures.

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You can also request a call back through the site.

Write your policy in trust

Writing life insurance in trust can speed up any payouts from a policy because probate can then be bypassed, potentially meaning that the payout can help to cover funeral costs.

A funeral plan

Some people choose to buy a pre-paid funeral plan.

These are a stand-alone option for paying for your send-of, sometimes referred to as 'funeral insurance'.

Funeral plans are often advertised as 'freezing the cost at today's prices'. You can usually buy these through a local funeral director.

What's included varies depending on the policy, the provider and the price. You can pay for a policy that simply covers the funeral director's costs, or one that pays for the entire thing, including a plot and the wake.

You may be asked to pay a one-off, up-front cost, or you may spread the cost over a number of months. Be aware that by spreading the cost you'll probably pay more overall.

Some of these plans have been heavily criticised for not covering all the expenses, leaving the family to have to make up the shortfall.

Make sure you ask the provider what happens if they go out of business, or if there are outstanding payments when you die.

Also, if you enjoy travelling overseas ask what happens if you die abroad.

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As always, you need to ensure you read all the small print carefully, so that you know exactly what's included and whether you're happy with that.

Pay out of your estate

If you're planning on using your savings to pay for your funeral, you should note that, unless it's a joint account (where the surviving joint owner immediately becomes the sole owner and can access the whole account without any break), any money held in your accounts will be frozen and will form part of your estate.

Funeral costs can usually be paid out of the deceased's estate and most banks will release the money to the executor or administrator to help pay for the funeral if they're shown an itemised bill and a copy of the death certificate.

Alternatively, if a solicitor has been appointed then talk to them about any costs you need to charge to the estate.

Remember that making a will can help to further speed up these processes and ensure that your possessions are distributed as you intended after you've gone.

Isn't there any state help?

You might assume that the state will cover some of the cost of a burial, but few people get official help.

While there is help available if you're on a low income and need to arrange a funeral, an assessment will need to be made on your circumstances to determine whether you qualify and, if so, how much you'll receive.

State financial support could potentially help to pay for things like the coffin, burial/cremation fees, travel costs (of people and of the body), flowers and the funeral director's fees.

To find out more about all these areas, see the official information on funeral payments.

If your husband, wife or civil partner has died before retirement and they had been making National Insurance payments, you may be able to claim a Bereavement Payment. Ask your nearest Jobcentre Plus for a Bereavement Benefits pack.

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Funeral cover and the National Insurance Act

Former prime minister David Lloyd George had originally hoped to include provision for funeral benefit in the National Insurance Act 1911, part of the Liberal welfare reforms of 1906-14 that many regard as the beginnings of the welfare state in the UK.

A 'good send-off' was considered so important by working class families of the day that it's been estimated many paid 2-10% of their entire household allowances into private insurance schemes to cover funeral costs.

This often saw them borrowing from money lenders and putting their families into financial difficulty to meet the premiums.

Lloyd George's plan was dropped under pressure from the insurance industry, prompting his biographer Roy Hattersley to comment:

"Dropping death benefit from the scheme was more injurious to the poor than later, and less respectful, generations have realised."

By Felicity Hannah
Overall rating page: 4.9 / 5 left 108 people.

Posted by at 09:39AM

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