Dignity Research revealed that the average cost of a UK funeral was £2,620 in January 2009. If you don't have sufficient savings set aside to cover the cost of a burial or cremation, you may wish to consider commencing a funeral insurance plan. The sooner you start, the less expensive it will be.
In return for paying a fixed monthly premium, you benefit from burial insurance and receive a defined lump sum payment when you pass away. This provides genuine peace-of-mind as you won't be leaving your family with a substantial bill for your funeral expenses.
Eligibility Criteria for a Funeral Insurance Plan
The criteria for burial life insurance are very easy to comply with as you just need to be a UK citizen and be between the age of 50 and 80. You'll need to maintain your payments for the remainder of your life or until your cumulative premiums equate to the guaranteed cash benefit.
Your monthly payment will never change but, if you stop paying the premiums, coverage will cease. There is no cash-in value. Although there are no medical checks, all providers of final expense life insurance will expect you to survive for a minimum period of one year from the date of your first payment.
How Much Does it Cost to Buy Burial Insurance?
A 70-year-old woman receives £4,534 of burial insurance for £33 per month from Liverpool Victoria (LV). However, the same level of cover will cost a man £40 per month. Men pay £84 per annum extra because women normally live for longer than men.
The other main factor that affects your premium is age. If your policy was started at 55, the cost of a funeral insurance plan is just £14 for women and £18 for men. Rates can and do vary so it's important to always trawl the market for the most competitive deal.
Affordable Alternatives to Final Expense Life Insurance Policies
- Social fund. If you are claiming benefits, such as pensions credit, you may be entitled to some help with funeral expenses. Assistance is limited as rates have been frozen since 2003.
- Bereavement payment. If you're under state pension age and have made sufficient national insurance contributions, you could be entitled to a benefit of up to £2,000.
- Donate your body to science. If you submit your signed and witnessed request in writing, you can donate your body for scientific experiment to a medical school. They will pay for cremation up to a period of 3 years later. See the Human Tissue Authority for further information.
- Back-garden burial. You'll need the consent of your local authority, but you can avoid cemetery fees by being buried in your garden. Future house buyers will need to be informed.
- Cardboard coffins. Reduce costs by getting buried in a coffin made of cardboard. Providers claim to be able to save families up to £500.
- Pre-payment plan. Request a quote to cover the cost of your funeral. Rather than paying premiums for 10 or more years, spread costs over a convenient period of time.
Pros and Cons of Death Insurance for Over-50's
If you don't have sufficient savings and can't afford a pre-payment plan, a funeral insurance plan provides a way of affordably spreading the cost of payment. You'll need to pay the premiums for the rest of your life so it's important that you ensure that you have sufficient disposable income to maintain the payment schedule. If you stop paying the premiums, any entitlement to coverage will be lost. Take some time to consider the alternatives to burial life insurance before proceeding.
Sources
Dwyer, Paul. (Jan 20, 2009). "What's the deal with funeral costs?" BBC News.
"50 Plus funeral benefit option." Liverpool Victoria (LV).
Asa Ghaffar - Asa has over 10 years of practical experience in loan approval, secured lending, bad credit repair, stock trading and debt management.
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