How can I make sure that I get the funeral send-off I want when I die?
Making your final wishes known well in advance may be the easy part – ensuring that there are sufficient funds to pay for the arrangements you have made may be another.
If you want to make doubly sure and relieve your surviving family members with any responsibility for raising the cash to pay for the arrangements you have made, there is funeral insurance.
What is funeral insurance?
It is very much what it says it is – a way of ensuring that the financial resources to pay for your funeral are there when you need them.
How does it work?
The money you are going to need when the time eventually comes for your funeral is provided by way of a settlement from a whole of life insurance policy – a life insurance policy which pays out at whatever age you die.
The settlement is provided in exchange for your paying a fixed monthly premium – for the rest of your life, or typically until you reach a certain age such as 85 or 90, depending on the insurer.
This type of life cover is typically available to individuals between the ages of 50 and 85 – and often goes by the name of over 50 life insurance.
What amount of life cover do I need?
The amount of cover you choose is entirely up to you – it might be informed, for example, by the estimated cost of the funeral arrangements you have planned.
Naturally, the size of the eventual settlement also determines the amount you need to pay in insurance premiums – so you need to be sure that this ongoing commitment is one you are going to be able to maintain.
What is the difference between term life insurance and whole of life insurance?
Term life insurance pays out an assured benefit to your surviving loved ones in the event of your death within an agreed period of time – the insurance “term”.
If you survive the end date of term life insurance, no benefits at all are paid out.
A fuller description of the way in which term life insurance works and the factors taken into account by insurers upon your application, are described by the Association of British Insurers (ABI).
Whole of life insurance guarantees a death benefit payment at whatever age you die – the only time there is no payout is if you discontinue payment of the monthly insurance premiums.
Do I have to complete a medical questionnaire to arrange my funeral insurance?
Not only is there no long and involved medical questionnaire to complete, but your proposal for over 50 life insurance generally comes with a guaranteed acceptance.
That said, if you are in good health and happy to answer a medical questionnaire, then you could get 40% more cover with a traditional life insurance policy for around the same price.
What is the difference between this kind of funeral insurance and a prepaid funeral plan?
A prepaid funeral plan offers you the chance to pay for your funeral costs in advance, and pay for them at today’s prices.
The principal difference with over 50s insurance, however, is that although the proceeds of the final settlement may be used to help to pay for, your funeral, they may be used for a host of other purposes too.
These include the opportunity to leave a financial legacy for your surviving beneficiaries, help them to meet any outstanding debts – such as a small mortgage balance, credit card balances or other forms of credit.