Monthly funeral plans could make paying for a funeral in advance more affordable. With low cost monthly instalments, you can spread the cost of your funeral over a fixed period and your monthly direct debit payments will never go up, even if funeral costs rise in the future.
How do monthly funeral plans work?
Pay monthly funeral plans let you arrange your funeral in advance at today’s prices however instead of going to the expense of paying for your funeral services in one go, with a monthly payment funeral plan you can spread the cost over a number of years. Lower monthly payments could make buying a plan more affordable but you will incur instalment fees, so the overall cost of the plan will be higher.
All funeral plan providers offer pay monthly funeral plan options, usually ranging from 1 to 20 years. Some companies even offer direct debit payments up to 25 years, but this depends on age as usually payments must be complete by the time you are 80.
You are covered for the services included in the plan after an initial waiting period of 1 or 2 years, depending on your plan provider. If you die after this period but before your instalments are complete, as long as your payments are up to date, your services as detailed will be provided with nothing more to pay.
How much do pay monthly funeral plans cost?
How much a monthly funeral plan costs will vary depending on:
- The funeral plan provider
- The level of service you require
- Over how many years you wish to spread your payments
- If there a deposit to pay
Do monthly funeral plans cost more?
Monthly funeral plans do cost more as your payments include an instalment fee, however the price of the funeral services detailed in your plan is still frozen and based on today’s costs, so paying in this way could still save you and your family money. It all depends on whether funeral costs rise and the amount you pay in instalment fees over the years.
In addition, from the 29th July 2022, FCA authorised companies will have to provide cover even if you haven't completed your payments**. So if you were to die after the initial waiting period but before your monthly payments are complete, the funeral services detailed in your plan would still be provided and your family would not be asked to pay the outstanding balance.
No deposit monthly funeral plans
Some plan providers charge a deposit of between £49 to £250 for monthly funeral plans however no deposit plans are available.
When comparing funeral plans, it could be worth considering the total cost of the plan including the amount you will pay over the full term of the plan and the deposit to ensure you are comfortable with the cost.
Types of monthly payment funeral plans
There are two types of monthly payment funeral plan. Both allow you to spread the cost of your funeral service but in very different ways:
1. Monthly instalment funeral plans
With a monthly funeral plan, you choose the duration of your instalments based on how much you can afford to pay per month so you know exactly how much the plan is going to cost you from the outset.
Once you have completed your payments, there will be nothing more to pay for the services included in the plan.
2. Fixed monthly payment funeral plans
With a fixed monthly payment funeral plan, your money is held in a life insurance policy, so your payments are based on your age. Premiums are payable for life or until you are 90, so there is a chance you could pay more for the plan than the actual cost of the funeral service.
Depending on the provider you choose, you will be covered for your funeral services after one year or two years, and if you die within this initial period, the money you have paid in will usually be refunded or used as part payment for the funeral services.
Alternative lower cost funeral plan options
If you prefer to pay a little less on a monthly basis, there are two alternative low-cost funeral planning options you may want to consider:
- Direct Cremation plan - a cremation without a funeral service, which is why a direct cremation plan is less than half the price of a traditional funeral plan.
- Over 50 life insurance - Over 50 life insurance, also known as funeral insurance, can cost as little as £4 a month and provides a cash sum when you die that your family could use to help with funeral costs.