The current cost of an average funeral plan is £4,136. You require at least ONE of three options to pay for a funeral.
- Savings, but you will have to increase them every year to cover the increase of a funeral, which is approximately 12-13% per annum.
- A guaranteed life insurance policy that will pay out on death.
- A pre-paid funeral plan ensures your funeral will be paid for when you pass away but at today’s prices. Depending on the provider, these can be paid outright or usually over some time. We can provide more information if required.
Understanding Funeral Costs
Funeral costs can significantly burden loved ones, especially if no plans have been made in advance. The average funeral price in the UK is currently £4,136, which continues to rise yearly. It is estimated that funeral costs increase by approximately 12-13% per annum, making planning essential to ensure your family is not left with unexpected expenses.
Options to Cover Funeral Expenses
There are several ways to ensure that funeral costs are covered, each with its benefits and considerations.
1. Savings
One way to cover funeral costs is through personal savings. While this is a straightforward option, it requires regular contributions and adjustments to keep up with the rising costs of funerals. Given the annual increase of 12-13%, reviewing and increasing your savings regularly is crucial. It can be challenging, especially for those with a fixed income or other financial commitments.
2. Guaranteed Life Insurance Policy
Another option is to take out a guaranteed life insurance policy. This type of policy pays out a lump sum upon death, which can be used to cover funeral expenses. The main advantage of this approach is that it provides a guaranteed payout, giving peace of mind that the necessary funds will be available when needed. However, it’s essential to carefully consider the terms and premiums of the policy to ensure it meets your needs and budget.
3. Pre-Paid Funeral Plan
A pre-paid funeral plan is an increasingly popular option. This plan allows you to pay for your funeral in advance at today’s prices, protecting you from future price increases. Pre-paid plans can typically be paid for outright or in instalments over a set period, depending on the provider. This option provides certainty that your funeral will be paid for without placing a financial burden on your loved ones.
Benefits of Pre-Paid Funeral Plans
Pre-paid funeral plans offer several benefits that make them an attractive option for many people:
- Cost Certainty: By paying for your funeral at today’s prices, you avoid the impact of rising costs. It can provide significant savings in the long term.
- Peace of Mind: Knowing that your funeral arrangements are in place and paid for can bring peace of mind to you and your family.
- Ease of Planning: Many providers offer flexible payment options, allowing you to choose a plan that fits your budget.
- Customisation: Pre-paid plans often allow you to specify your preferences for the funeral service, ensuring that your wishes are respected.
Making the Right Choice
Choosing the best way to cover funeral costs depends on your circumstances and preferences. Here are some factors to consider when making your decision:
- Financial Situation: Evaluate your current financial situation and determine how much you can allocate towards funeral expenses.
- Future Planning: Consider how you expect your financial situation to change. For example, can you maintain regular savings or life insurance premiums?
- Family Considerations: Think about the impact on your family. A pre-paid funeral plan can relieve your loved ones of the financial burden and the stress of making arrangements during a difficult time.
- Flexibility: Assess the flexibility of each option. Pre-paid plans can be tailored to your needs, whole life insurance policies offer guaranteed payouts.
Why Choose Us?
At iLaws Scotland, we understand the importance of planning to protect your loved ones from financial stress. Our team of experienced professionals is dedicated to providing personalised advice, whether you’re making a will or setting up a Power of Attorney. We offer a range of solutions, including pre-paid funeral plans, to ensure your wishes are met and your loved ones are safeguarded. Let us guide you through the process to choose the best options for your needs.
Conclusion
Funeral costs are a significant consideration that should not be overlooked. With the average funeral cost now standing at £4,136 and rising annually, it’s essential to plan. Whether through savings, a guaranteed life insurance policy, or a pre-paid funeral plan, taking proactive steps can ensure your loved ones are not left with unexpected financial burdens.
By choosing a pre-paid funeral plan, you can lock in today’s prices and provide peace of mind for your family. At I Laws Scotland, we help you navigate your options and find the best solution. Contact us today to learn more about how we can assist you in planning for the future and ensuring your loved ones are protected.
