Should you consider a funeral plan if you are under 50?

Should you consider a funeral plan if you are under 50? main image

The younger you are when you purchase a prepaid funeral plan, typically the more you can inflation-proof the cost of your funeral director's costs – leaving those you leave behind without financial worry.

Inflation is not going away. That is the conclusion reached by the majority of economists and confirmed by recent predictions made in the May 2016 Inflation Report by the Monetary Policy Committee of the Bank of England.

Even more certain is that sooner or later every one of us is going to die.   

So, how might you protect against the inflationary pressures on the cost of your eventual funeral and the pressure on your loved ones financially, so that your wishes for your final arrangements proceed in the way you want them to?   

Over 50 life insurance

If you are already aged 50 or more, one of your choices is an over 50 life insurance policy.

These policies are frequently used in order to provide a cash lump sum to be used upon your death.

Acceptance for this type of policy is typically guaranteed, as is the amount of the eventual cash payout. These are whole of life insurance policies, so pay out when you die. Over 50s life insurance policies require the payment of a (fixed rate) monthly premium for the remainder of your life – although some providers waive the payment of such premiums once you reach your 90th birthday.

If you are under 50, an over 50 life insurance policy of course is not available to you.

Even if it were, you face the risk of the assured cash benefit proving inadequate for meeting your intended funeral arrangements when the time comes. Even more of a disadvantage is the fact that if you were to take out such a whole of life insurance policy when you are still less than 50 years old, the total you are likely to pay in premiums is likely to exceed the value of the final cash payout.

Under 50 funeral plans  

If you are under 50 and worried about the almost inevitable erosion of your savings and the purchasing power of your wealth by inflation, you might instead want to consider the benefits of a prepaid funeral plan.

Funeral plans under 50 give you the ability to plan your final arrangements down to the last detail and even to designate your chosen firm of local funeral directors to carry out those arrangements when the time comes. By prepaying those costs at today’s prices, you avoid the ravages of inflation on your funeral directors costs at whatever ever age you happen to be at the moment.;

If you are under 50, it is likely to be very many years, of course, before the funds you have paid in advance actually need to be used. It is time enough for even the more successful firms of funeral directors to fall on hard times and for their businesses to go under. So is the money you have paid at risk of going under too?

Fortunately, the answer is no.

Prepaid funeral plans – and especially those regulated by the Funeral Planning Authority – typically involve the safekeeping of your funds in an independent trust or applied to the purchase of a life insurance policy on your behalf, so that the value of your prepayment is preserved.

You can click here to find out more about under 50 funeral plans.

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