Thinking of paying for your own funeral?

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It is not something we like to think about, but as we get older we start to accept it is inevitable and make plans for our funeral.

Many people want to make sure everything is neat and tidy when they die, so increasingly they are opting for pre-paid funeral plans. These plans tend to cost about what you would pay for an average funeral, and Dignity Funeral estimates this is £3,527.

However, it is important to check out what is included in the amount you have paid for and it fits your requirements to a tee. Otherwise you could find your loved ones are saddled with extra costs as your plan may not include important things such as the use of a limousine, or they may restrict the miles they travel.

As mentioned, these plans are lump sum plans, but they also can be purchased over five years on a regular premium basis, but by doing it this way you could add between 15 to 26% to the cost of the funeral. The main selling points of the plans are that they freeze your funeral costs at today’s prices, but generally not third party costs that could include for example the grave digger.

The alternatives to the pre-paid plans are self-funding, paying from your estate or setting up a savings account in joint names with a relative to ensure money is available when you die. Another option is to buy life cover, and these policies are often known as over 50s plans. This allows you to spread the cost thinly with a 61-year-old man paying £15 per month for a £3,230 plan with Legal & General with premiums stopping at 90.

These plans are not underwritten so anyone can have one, but generally if you die within one to two years, normally only a premium refund is given on the plans.

If you are in decent health and decide to go for the life route it is far better to go for a whole of life plan that for £15 per month would pay out £7,796 that equates to 2.41 times the over 50s plans.

This would allow for a high grade funeral and money left over for your loved ones. As always, it is worthwhile shopping around and seeking independent financial advice before committing to any of the plans mentioned.