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.

Pre-paid funeral plan

Which is the better option?

Pre-paid funeral plans are an excellent option for those who want to spread the cost of their funeral. Therefore, monthly instalments are the most popular way of paying. The only downside? You’ll have to incur the interest rates associated with spreading the cost. However, the interest rates attached to pre-paid funeral plans are usually very reasonable.

With funeral insurance, though, the disadvantages can be slightly more off-putting. It can sometimes feel like a bit of a gamble, as the fixed lump sum that pays out once the person has died doesn’t grow if more payments are made. This means that if the person ends up living longer than anticipated, they may end up paying more into the amount that is actually received by the family.

On top of this, the funeral service will still need to be arranged once the lump sum has been paid out. Unlike with pre-paid funeral plans, where family and friends benefit from having more time to grief properly, without having to worry about arranging a funeral.

Start arranging your pre-paid funeral today

At Celebration of Life, we offer pre-paid funeral plans for those looking to protect their loved ones, even after death. Starting at just £1,450 (or £124.33 for 12 months), you can secure our fully inclusive pre-paid direct cremation service that covers you for any eventuality. We offer extremely flexible payment terms, running all the way up to 120 months (just £15.58 per month!) and guarantee you or your family won’t have to pay a penny more. We handle everything for you, from collection, through to the cremation, and delivery of the ashes. So, if you’re looking for a cheap and fuss-free pre-paid funeral service, contact us at Celebration of Life today – we’re always happy to help.

Direct cremation

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