Funeral Plans – Are they worth it? Don’t be fooled…

When you look up various funeral plan firms, you are offered a range of packages. Here is the first issue – the packages are limited with no flexibility, unless you want to leave your families paying extras at time of need (surely, this goes against the reason why a funeral plan would be purchased in the first place). Generally, the packages are simple (let us say ‘Bronze’ for argument’s sake), then something with a higher quality coffin and one limousine (let’s say ‘Silver’) to something with an even higher quality coffin and 2 limousines (let’s say ‘Gold) etc… The plans give the funeral director some room to choose the ‘suitable’ coffin that fits the packages. There is not much flexibility for personal wishes, yet in our experience, the plans cost much more than a more bespoke funeral with us at today’s prices.

If these packages suit your needs and wishes, then in some cases funeral plans can be great – but continue to beware when considering which company to choose…

There are many firms out there who are set up simply with a laptop and a phone (or so it seems) and once they have secured a sale of say a ‘bronze’ package, for around £3595, they then skim off £1095 from this fee (I assume you would call this their undisclosed ‘admin fee’) before passing the remainder onto the funeral director for the actual cost of the funeral. The funeral director, in this case, would receive £2500 but this must also cover £1000 towards disbursements. They told you at time of purchase that there may be some additional disbursements to pay at time of need…but it will pretty much be covered…so you think, that’s fair (after all we are constantly being told in the media a simple funeral is circa £4000 right now, so it feels like a good idea). What you are not told is, you definitely will have to pay more for disbursements at time of need (not even a possibility) and the company now have to find a funeral director somewhere (hopefully, your local town) to carry out this funeral for a hugely reduced sum; sometimes even leaving the funeral director to do the funeral ‘at cost’. You may be thinking, so that’s the funeral director losing out on money which doesn’t really affect me….well, if you had paid the original sum into a savings account or an independent way plan (I will come to this) you firstly wouldn’t have the guarantee of paying more for disbursements (don’t forget it wasn’t only the funeral director that got left with a shortfall but the disbursements that were originally in the cost of the plan are now reduced too); Secondly, you may not be served by a funeral director in your area or even one you have heard of, as reputable firms have to cover mortuary costs, staff costs and premises costs alongside vehicle costs etc.. and simply could not afford to accept the funeral. Recently, we found another firm who were offering even less than the example above. We found them only because a family came to us at their time of need and mentioned they had a plan for their loved one and would we help. We want to help, and it is a local family. We find out that the plan provider has taken £1499 off the top of what the family paid (I assume for their phone call for selling the plan). If we do not help, the family will have to go to a funeral director out of town and possibly out of county. This will not do. The bereaved are vulnerable and should not have to deal with any added stress that was not anticipated due to a crooked funeral plan company. Yes, I say crooked as it is not transparent, the family did not know they were making this choice and they did not want to be in an even more vulnerable position than they already are trying to process their grief.

I looked up the reviews on some of these companies – the reviews are written by those who have taken out the plans but not yet needed them – hence, based on how they were treated as a customer by the sales team – not on the quality of the actual ‘product’. I could not find any reviews (although I disclose that I did not read them all!) about the actual value of the product being sold.

The cancellation fees for these plans are high. The plan above had a cancellation fee of 25% of the value of the plan i.e. over £900 for a simple service package. This ties in the client who is likely to be in a position where they cannot afford to cancel. Another firm example was a flat fee of £500. We worked out once that if the client enquiring with us paid the cancellation fee of £500 and had the same funeral service requirements with us (at our present-day prices) they were still saving money! Recently, we worked out that if our client cancelled the plan and paid the cancellation fee, they would have more money to help with funeral costs than if they had seen the plan through to maturity! It seems ludicrous…. because it is. Why are the financial authorities not alarmed by this? I read an article in the Guardian whereby another funeral director commented on this scandalous approach with funeral plans, but this was written in 2017 – things need to change.

In a time where there are so many people scamming money out of us whether online or over the telephone or even in person, we need to be more informed. We are not told of all the above factors and companies simply are not all transparent. We chose Golden Charter as our main provider as they allow us to sell ‘Independent Way’ plans which means we can record a client’s wishes to the smallest of details and the clients only pay for exactly what they ask for eg. Type of coffin, funeral vehicles, order of service, floral tributes etc… and Golden Charter charge £249 for their administration of the plan. The money is secured into a trust and grows annually. If a client cancels, they simply do not get their administration fee refunded but can retrieve any money that has been paid in to date. This is totally transparent. Some people do not mind paying £249 for the peace of mind of having their funeral wishes recorded and planned (not even worrying about whether the fund grows to cover this cost), some people know that with rising funeral costs, paying £249 now, will certainly save them more money in the long run as they are securing today’s prices with their chosen funeral director. This is the main reason why people take out a funeral plan – to guarantee today’s prices so they can escape the rise in fees in the future. Whatever the reason, the plans are transparent, and you have the information to make the right choice for you.

BBC and the Guardian reported in January 2020 that a UK simple funeral now exceeds £4,400 – an all-time high. This media pressure does not help the situation as many people use this to push the sales of their funeral plans exciting the situation. You have to remember that whilst £4,400 might be an average for the sake of ‘news’ it takes into consideration wide variants in costs between corporate firms and independent firms. Here at Hadaway & Denton, for example, we save families over £1000 (often much more) on the cost of a simple funeral compared to our local corporates. There are other companies who care to keep funeral costs down to a fair level for their local families; so here are my suggestions to help our loved ones and ourselves make the best-informed choices:

Ask the funeral plan provider the growth rate of the investment fund used e.g. Last 5 years. If they cannot answer, they are withholding information that is essential to making the most informed choice for ‘value’. Ask yourself why?

Ask for a list of funeral directors who accept their plans before signing anything or giving money – do they have many reputable firms on their list? If not, this is an alarm bell.

What is the back up plan if the funeral director nominated goes out of business? Where does the plan go then and how will you be covered? Ask how much of the payment you are making goes to the actual payment of the funeral and ask them to disclose how much money they take from the paid sum for their administration and get this in writing!

If you feel pressured i.e., you keep getting cold calls or stopped when out for a local shop – walk away or report the phone calls. This is not a good start showing their lack of care and mere demand for sales.

Check what is included in the plan and make sure you are happy with it – do not choose it because it feels like your only choice because there is not anything but traditional typical packages available. Many of us Independent Funeral Directors do better and can offer a bespoke funeral plan.

Make sure you know what is guaranteed and what is not eg. Funeral director fees/disbursements and check the current day prices for these services i.e., a quick call to a local independent funeral director will help.

I think that the above will sift out all the bad from the good and then, take your time to read the material offered before signing or paying. What is the best option for you?

When we grieve, we rarely even care about money let alone being able to focus on making the most informed decisions. We are grieving and our focus often fails us. We need honest, reliable, professional, caring support offered with integrity. We need this offered by funeral directors at time of need but also by funeral plan companies when we are trying to do the best thing for our families in advance of our passing.

Any questions at all, we are always happy to give advice to help inform people and strive forward to maintain transparency within the funeral industry.

Thank you for taking the time to read my, in essence, rant and I hope it helps.

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