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Should You Fund Your Own Funeral?

Photo by Pavel Danilyuk:

Funerals can be expensive occasions. In fact, the average funeral currently costs about £4000. This money has to come from somewhere. You can rely on loved ones to pay for it, but what if your loved ones don’t have this money? Should you really expect them to take on debts to pay for your funeral? Will they even be able to afford a funeral for you?  

Paying for your own funeral can prevent your loved ones from having to take on the financial burden. Funding it also allows you to determine exactly how much you would like to spend on your funeral. But just how should you fund your funeral? Here are a few different options.

Pre-paid funerals

Some funeral directors offer pre-paid funeral plans. These plans allow you to plan out your funeral and pay for it in advance through instalments. When choosing a pre-paid funeral plan, it’s important to look into what costs are included in that plan – certain expenses like headstones and plot fees may not be covered. You should also look into the terms and conditions to find out a) what will happen if you die before paying off all the instalments, and b) what happens if the funeral company shuts down (unlikely, but it can happen). This ensures that there’s no way you will lose the money put into the plan. 

Life insurance

Life insurance is an insurance policy that pays out a lump sum of money into your account when you die.  This money can then be put towards funeral costs, probate fees and various other expenses that may need to be covered (as well as providing some money to pass down to your loved ones). Life insurance is useful if you haven’t got enough assets to hand down to cover costs. Of course, you need to be able to afford life insurance rates – which can vary depending on your age, your health and your lifestyle. If you are already in your senior years and in ill health, you may find that some insurers won’t take you on or will charge very high rates. In these cases, life insurance may not be worthwhile. 

A funeral trust

It’s possible to put money into a trust to pay for your funeral. Once this money enters the trust, you cannot access it, however your loved ones also cannot access it until your death. You can contribute as much money to the funeral trust as you want and you can contribute this money when you feel like it. Just make sure to choose a beneficiary who you know will spend this money on your funeral. 

Your estate

Some people are fortunate enough to have money in savings or assets (such as property) to pay for their funeral. This can save you having to put in place any other plans. However, you need to be sure that your estate will always be worth enough to cover your funeral. It can take a while for money from your estate to be released, however many funeral homes will usually cover the cost in the meantime. If when money from the state is released there are not enough funds to pay your funeral director, your loved ones will have to take on the funeral bill, so bear this in mind. 

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