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 whole 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 even 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 guess yours is probably not much better. Additionally, in the next few years we could 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.
To overcome this problem I have put some money into an ultra safe managed investment fund, which protects the value of the money I have set-aside, takes out the multiple tiers of profit taking and allows full flexibility over which funeral services will eventually be used. I chose a low-risk, cautiously managed fund that actively avoids volatile instruments.
If you would like me to send you details of the fund I have used, or have any questions or comments that you would like to make, please feel free to contact me here.