The death of a loved one is never easy. Aside from emotional issues, there are also a variety of practical matters which can be complicated and costly. Unfortunately, if the person did not properly plan for their funeral before their passing, the surviving loved ones can be faced with a complicated financial situation.
When my Uncle Colin passed away in a car accident, everyone in the family was taken by complete surprise. Only 52 years of age, Colin had made no legal preparation regarding his posthumous wishes. During a time of heartbreak and shock, I was also left with a variety of financial and legal obligations on his behalf, including the burial expense.
Certainly my uncle didn’t purposefully want to leave me with no assistance with funeral prices. He simply hadn’t properly prepared for his funeral, and the related funeral plan cost, in any way. Today, about 10 months later, I’ve created this guide to help others avoid the situation I was in.
Below is my complete guide to funeral expenses and the various options available. While this isn’t the most pleasant topic, the cost of funeral services is an issue which affect us all.
This guide is for both those who want to compare funeral plan pricing for either their own funeral arrangements or for those of a loved one. We’ll discuss the average cost-price of a funeral, and the various ways pre pay funerals can result in a cheaper, more affordable funeral plan suitable for any budget:
Nobody wants to dwell on thoughts about their own death or the death of loved ones. But, at the same time, nobody wants their passing to be a financial or logistical burden for those still here.
A fatal, unexpected accident can occur to anyone. For instance, people between the ages of 15 and 19 make up 25% of all road fatalities. So basically every adult, even young adults, should make some basic preparations regarding their wishes and their finances should they die without warning. This is especially important when family members depend on that person for financial support.
Here are some initial steps everyone should take:
This is a simple document with a clear overview of the person’s entire financial picture. You’ll want to list all bank accounts, credit cards and other financial accounts. Spouses and adults children often don’t know all the details of every financial account, especially if the finances are mainly controlled by one family member. The Financial Factsheet is a broad overview of your entire financial picture.
Along with your financial information, you also want to list all the various accounts associated with your household. These will be organisations like the power company, water company, milk delivery and even Facebook. You’ll want to list all necessary login information, too.
Obviously, your Financial Factsheet is a pretty valuable document. So you’ll need to store it securely. Instead of online, many people find the most secure option is to write the information on a piece of paper. Then you can store that paper in a home safe, a safe deposit box (with joint access for a spouse) or even at a solicitor’s office.
You’ll want to also create a will so your property is distributed as you wish. If you have a relatively simple estate, you can probably create a will yourself using online resources. But if your estate is larger or has complications (such as personal debt) you’re probably better off consulting a legal professional. Often this person can help you create a Financial Factsheet, too.
An average funeral starts around £3,000 and then increases based on the individual’s wishes, needs and budget. The Centre for Death & Society did a study on funeral affordability and published their research and findings here. For most people, the price of the funeral must be taken into careful consideration. Assistance with funeral expenses is often available in the form of funeral plans. There are also a few options for low-cost funerals:
If you die, your assets aren’t immediately made available to your heirs, even if you have a will. So loved ones left behind might have to pay for the cost of funeral services out of their own pocket. There are a few options to prevent this, however, including:
You can always simple set up a savings account to be used for your funeral expenses. The advantage here is that interest will grow over time. Saving for a funeral using a traditional bank account is also very easy to setup and requires very little attention.
Unfortunately, in most cases interest will not keep up with inflation. This means the cost of your funeral could be more than the money in the account, even if the account has been open for decades.
Available only for those over the age of 50, this policy pays a fixed lump sum to the family of the deceased. Most of these products are available for purchase without a medical screening. This makes the policy appealing to anyone who can’t afford or otherwise obtain life insurance due to a pre-existing medical issue, which differs to that of end-of-life insurance.
Like a savings account, this product does not also grow with inflation. There’s a possibility the policyholder could pay more in premiums than the eventual claim. For this reason, over-50 life insurance policies aren’t always the best option, especially those who are generally healthy.
After your death, certain funeral expenses can still be deducted directly from your back account. Most banks will release the necessary amounts as long as a family member provides a copy of both the death certificate and a bill from a funeral home.
The disadvantage here is banks will typically only release funds for average funeral expenses. In the immediate aftermath of a death, the survivors might need money from the estate for more than just the price of a funeral.
Even if you choose the cheapest funeral plan, help with funeral expenses might be only one reason why your heirs will need immediate access to your funds. They might need help with rent, utilities and similar expenses which you normally helped pay for.
According to the National Funeral Directors Association, pre paid funerals are an increasingly popular option. The idea is simple: You simply pay for the funeral in advance, locking in prices while also choosing exactly what type of funeral you want.
Paying funeral costs in advance will cover most everything related directly to the funeral services. This includes:
Most pre pay funeral plans do not include burial plots or headstones. However, most funeral directors will add those into the plan, although this will increase the price of the funeral.
Some plans offer “guaranteed payments” which means the provider will pay all burial expenses. Other plans offer partial payments for burial expenses, where an additional fee will be required upon death. A partial payment can still help you beat inflation.
A funeral plan is far more likely to cover the price of cremation than burial. The average cost of cremation is a relatively fixed expense, whereas burial plots only grow in scarcity over time. If you’re interested in pre paying for cremation, make sure the policy includes a “guaranteed payment.”
There is no one type of funeral plan, or even one type of cheap funeral plan. Most providers will certainly be happy to add as many options as you’d like to pay for. They’ll also work with you to provide low cost funerals whenever possible. You can even arrange payment plans for funerals.
Yes and yes.
After my uncle died, we had to plan for his entire funeral in just a few days. To be honest, we weren’t terribly concerned about having a fancy service with a theme or anything particularly elaborate. He was a humble guy who would’ve have been more concerned with the price of the funeral than the colour of the flowers.
But even the simple logistics of organising the funeral was daunting. This, to me, is the huge advantage of paying for your own funeral well before it occurs. Not only is the expense of funeral services generally lower, but your loved ones will be relieved of a possibly unexpected burden.