Pre-paid Funeral Plan : Are you covered?

Paying for your funeral

Pre-paid funeral plans can be a huge disappointment. Mainly sold by funeral directors' chains they tie you into using the funeral director who sold you the policy – a restriction that is really at odds with the concept of FTDF. Additionally, much of the cash you put in is eaten up by the multiple tiers of profit involved in the selling chain (from funeral director to insurance company and selling agent).

And it's worse if you pay by instalments, as sellers invariably make hefty administration charges against the payments. Taken across the full term of the plan, this can mean that you will pay about 30% extra – great for the seller, but not much good for you or the family and friends who will be carrying out your funeral wishes.

Some people just put money aside in a bank deposit account. But this is also problematic. Bank interest rates are lower than they have ever been – my own deposit account rate is just 0.1%, and I suspect yours is probably not much better. Additionally, the next few years are likely to see a significant and sustained increase in the annual rate of inflation. Combined with low bank deposit account rates, this means that money put aside in a deposit account to fund the funeral you want is going to be quickly eroded.

The FTDF alternative

We have been working on developing a new form of pre-paid funeral plan for FTDF which protects the value of the money set-aside, takes out the multiple tiers of profit taking and allows full flexibility over which funeral services are used. It will only be available to FTDF members.

We have used a professional fund manager to set up a special FTDF fund which uses ultra safe investments to generate a yield that will exceed the annual rate of inflation and protect the value of any money that you set aside for your funeral. It actively avoids volatile instruments, like the stock market and derivatives, preferring proven fixed-rate interest bearing investments. Against a target of 5% annual growth, the fund is currently returning 7%.

Easy to understand

The pre-paid plan is available in units of £2,400.

You might want to just buy a single unit, to help defray the costs of your funeral, but if you have more exotic wishes then you might want to buy more units: 2 units would cost £4,800, 3 would be £7,200, and so on. You decide how much you want to set aside, and how many units you want. You can make one-off payments into the plan or pay by quarterly instalments – whichever suits you best. If you elect to pay in instalments there will be no administration penalty costs deducted from your payments - all the money will go into your pre-paid plan. You can also top up your plan at any time.

Flexible

When you take out a FTDF pre-paid plan, you will be asked to nominate the bank account that will be credited with your plan funds after you have died – this can be one of your own bank accounts, or the account of one of your FTDF Trustees. Then, once we have been notified of your death by one of your Trustees, we will quickly credit the nominated bank account with the full value of your plan, so that your funeral wishes can be met in full. Your Trustees will be free to choose a funeral director and other funeral service providers that best match your particular funeral wishes.

Feedback

Each year you will receive an annual statement of your plan's value, so that you and your Trustees or family can see how much has been set aside to pay for the funeral you want.

If you are interested in setting up a Funerals To Die For pre-paid plan or have any questions or comments that you would like to make, then please contact us here .

Register Your Interest

You can register your interest here to receive details of the Funerals To Die For pre-paid plan as soon as they are available.