A funeral plan can help you cover the costs of your funeral in advance so your loved ones aren’t left with unexpected costs.
How much your funeral costs really depends on your wishes. But according to the SunLife Cost of Dying Report 2020, the average price for a basic funeral – the send-off, including flowers and funeral notices, as well as professional fees - was £9,493
There are two main ways you can cover the costs: a funeral plan or funeral insurance.
You could also choose to include funeral cover as part of your life insurance. Otherwise, the cost could be taken from your estate, or you could save the money separately for yourself.
Your loved ones can use part of a life insurance payout to cover the cost of your funeral. But, depending on the type of life insurance you have, it might not cover everything.
If you’ve chosen a decreasing term life insurance policy, for example, with the main aim of paying off any outstanding debts, there might not be enough left to cover the whole cost of your funeral as well.
You can opt to have funeral cover included in a level term life insurance policy instead, which would pay out an agreed amount on your death.
If you’ve chosen a term life insurance policy, and you die outside of the fixed period of your policy, there won’t be a payout.
There are several ways you can choose to pay for your funeral, and there are different levels of cover available to suit your budget
A pre-paid funeral plan is a stand-alone option for paying for your send-off.
You can either pay in advance in one payment or spread the payments for the plan over a number of months. What’s included varies – some policies simply cover the funeral director's costs, while others pay for the entire thing, including a plot and the wake.
Cover tends to come in tiers from basic to more premium options. Read all the small print carefully, so you know exactly what's included.
You’ll sometimes hear these called over 50s plans. You make regular payments to the insurer and they’ll pay out a lump sum when you die.
You don't have to set it up so that your beneficiary uses the payout to cover funeral costs, but many people do and it's often what the payout's used for.
Be wary, you’ll make payments right up until you die, or up to a specified age, so you could pay more than you get back.
If you want to cancel your insurance, you won’t get your money back. Missed payments often terminate policies, and you could lose the money you’ve put in. Make sure you're had a good look at the terms and conditions before you take out a plan.
If you’ve got life insurance, you can put it into a trust. You might get the option to do it when you buy a policy too. Life insurance in trust allows the pay-out to go straight to your beneficiaries, so it won’t be subject to inheritance tax. Because it’s managed by a trustee, you also bypass the probate process – where your executor is given the right to deal with your estate.
It can also give you more control over how the funds are used, making it easier to be sure some money will be set aside to cover funeral costs.
Setting up a trust isn’t always straightforward – you’ll need to appoint trustees and choose the type of trust you want. If you use solicitors, there’ll be a fee to pay.
You can use your savings to pay for your funeral. However, unless it's a joint account (where the surviving joint owner can immediately access the whole account), any money held in your accounts will be frozen when you die. That’s because they’re part of your estate and might be subject to inheritance tax.
Most banks will release money to pay for a funeral to the executor or administrator if they're shown an itemised bill and a copy of the death certificate.
Talk to your appointed solicitor or advisor about any costs you need to charge to the estate.
A funeral plan could help contribute towards:
But some funeral plans won’t cover:
You qualify for government assistance with funeral costs if you’re on a low income and receive certain benefits. An assessment will be made on your circumstances to determine whether you qualify and, if so, how much help you'll receive.
State financial support could help to pay for things like the coffin, burial/cremation fees, travel costs (of people and of the body), flowers and the funeral director's fees.
The gov.uk website has more information on getting help with funeral costs.
You can also check whether you'll be eligible for the Bereavement Support Payment.
Use our calculator to get an idea of how much life insurance might be right for you
SunLife (2020), Cost of Dying Report
Page last reviewed: 27 September 2022
Next review due: 28 November 2022