Why a funeral can catch families out
A funeral is often the first big bill after a death, and the funeral director usually wants paying within weeks. Your bank accounts may be frozen until probate, so your family may have to cover it from their own savings.
A small policy in trust pays the trustees directly, so your family has money in hand when the bill arrives.
Some insurers offer a small early payment from a larger life policy to help with funeral costs while the main claim is processed. Check whether your existing cover includes this.
Over-50s plans
Over-50s plans accept anyone within the age range without health questions. You pay a fixed monthly amount and the plan pays a fixed sum when you die. If you die from natural causes in the first year or two, many plans pay back the premiums instead of the full sum.
Because premiums continue for life, or to a set age, you could pay in more than the plan pays out if you live a long time. Check whether the policy stops premiums at a certain age.
Over-50s plans have an age range for joining, which varies between insurers. Check that you are within it, and look at any cut-off age where premiums stop.
Underwritten whole of life cover
If you are in reasonable health, a fully underwritten whole of life policy may give a larger sum for the same monthly cost. It asks health questions but usually pays the full amount from day one.
Some people already have life cover that could pay for a funeral. Check existing policies, pensions and workplace benefits before buying something new.
Couples sometimes choose a joint whole of life policy that pays on the first death, so the survivor has money for the funeral straight away. Others prefer one policy each.
- Over-50s plan: no health questions, early payouts limited
- Whole of life cover: health questions, full cover from the start
- Prepaid funeral plan: pays the funeral director for a set service
Prepaid funeral plans are a different thing
A prepaid funeral plan lets you choose and pay for a funeral in advance with a provider. It covers a set list of services, and the provider pays the funeral director. Prepaid funeral plan providers in the UK are regulated by the Financial Conduct Authority.
A life policy pays cash to your family, who can then choose how to spend it. Some families prefer that flexibility, while others like the certainty of a plan.
Think about inflation too. A fixed sum that covers a funeral today may cover less in twenty years. Some whole of life policies let you increase the sum over time to keep pace with rising costs.
How Hi Tomorrow helps with funeral cover
We compare over-50s plans with underwritten whole of life cover so you can see which gives your family more for your budget. We explain the early payout rules and whether premiums stop at a set age.
We set up a trust where it is available, so the money reaches your family quickly.