How To Plan Ahead To Pay For Your Funeral Costs

Jane Wardle

Written by Jane Wardle on February 20, 2019

Updated February 20, 2019


The cost of holding a funeral is always increasing and can currently set families back over £4,000 just for the essentials. Planning ahead for your death is often difficult to think about, but it can protect your family from a hefty bill after you’re gone.

There are various ways that you can cover your own funeral costs and prepare for your own celebration of life so that your loved ones don’t have to worry during what will already be a difficult time. Life insurance and prepaid funeral plans are two of the most popular ways that you can plan ahead for your own funeral, and there are a few things you should know if you are considering taking one out.

This guide covers how to plan ahead to pay for your funeral costs and a few tips from our experts.

What are prepaid funeral plans?

A prepaid funeral plan is a good option for individuals who want to pay for their funeral in advance at today’s prices. These plans can vary greatly, so it is important to understand exactly what is included before making any decisions on which plan is for you. You will agree on a cost for the plan and agree on what is included with the plan provider.

After you pass away, your funeral plan provider will pay the Funeral Director, and your loved ones will not have to get involved with the admin or finances at all.
Most prepaid funeral plans will cover essential costs such as a Funeral Director, coffin, care of the body, cars, pall-bearers and cremation or burial costs. They can mean you are committed to one particular Funeral Director or company, which is important to consider if you think you may move away in the future.

Funeral plans generally don’t cover costs for things like flowers, headstones or a wake, although if you specifically want to include these, you may be able to arrange it with your plan provider.

Funeral plans often have various payment options, and you can choose to pay in one lump sum or as monthly payments over a set period of time. If you decide on monthly payments and don’t pay off the full balance during your lifetime, then your family will be left to pay the remaining balance on your behalf.

Every funeral plan is different, and what is included will vary greatly between providers. Make sure you thoroughly check everything that is provided and ask about anything else that you may want.

How to plan funeral costs using life insurance?

Another option for a lot of people is to use a life insurance policy to help cover their own funeral costs after they pass away. Funeral Life insurance policies will pay out a lump sum to your beneficiaries in the event of your death, and you can ensure that it includes enough to cover the cost of your funeral. Some life insurance policies will pay out if you pass away during the term of the policy, while others will guarantee a payout no matter what age you live to.

If you want to use life insurance to cover the cost of your funeral, then it can be worth choosing a whole-of-life policy to guarantee that your family will receive a payout.

If you are using your life insurance to cover the costs of your funeral, then your family may still be left to plan the event, and you are just leaving them the money to fund it. Some life insurance policies include a Funeral Benefit Option, which means that after you die, some of the money from your life insurance will be paid directly to a Funeral Director who will arrange the funeral to your wishes.

When using a Funeral Benefit Option, it is like having a prepaid funeral plan built into your life insurance policy, and you may be committed to just one Funeral Director.

If you are planning on having your family use a life insurance payout to cover the cost of your funeral, you should ensure the payout is enough to cover this as well as the other financial commitments they may have after you are gone, such as a mortgage or other debts.

Saving for your funeral costs

Prepaid funeral plans and life insurance are both popular options for planning your funeral costs in advance, but another common choice is to use your own savings. You can choose to go it alone and save the money needed to cover your funeral yourself, and you can discuss your wishes and plans with your loved ones, so they are aware of what you would like and how to pay for it.

Saving for your funeral is a good option as you will not be paying any extra in fees or premiums. However, you will need to ensure you save enough to cover all the costs and then don’t touch your savings for your lifetime.

If you put your funeral savings into an account with joint names with a family member, then they will have easy access to it to fund the funeral after you have passed away. Read our guide on how much a funeral costs.

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