Like with most things in life, planning ahead is a sensible move – and your funeral is no different. Ensuring everything’s in place when the inevitable happens not only reduces hassle down the line, but protects your loved ones from any financial stress.
For the obvious reasons just mentioned, many people decide to take action before they pass. This is usually done by purchasing a pre-paid funeral plan, or paying for funeral insurance that will cover certain costs once they’re gone.
But what exactly is a prepaid funeral plan? How does it differ from funeral insurance? And which is better? Read on as we explain the options so that you can decide for yourself.
What is funeral insurance?
We’re all aware of what car and home insurance is, right? Well, funeral insurance is fairly similar, but with a few key differences.
With funeral insurance, you pay a monthly figure which goes towards a lump sum that is paid out upon death. This lump sum figure varies depending on the insurance plan you take out, and isn’t necessarily used to cover funeral costs only. It can be spent on pretty much anything, such as settling bills, but is predominantly designed to pay for the funeral.
So, how is a pre-paid funeral plan different?
What is a pre-paid funeral plan?
If a pre-paid funeral plan is chosen instead, rather than the family receiving a lump sum upon death, the costs of an already arranged funeral will be covered.
Usually, the type of funeral would have already been chosen, but the family may have to make some decisions based on what they believe their loved one would have wanted.
Once the funeral provider receives confirmation of the death certificate, they will provide the package that has already been paid for via the pre-paid funeral plan. This will often cover transportation, the coffin, the service chosen (whether it be burial or cremation), as well as any other related costs.
With pre-paid funeral plans, many providers give the option to pay in full or spread the cost over a number of years. After the agreed amount has been fully paid off, no further costs are required.