Most families keep a constant watch on the cost of living, but so few families take a moment to check the cost of dying. We understand why. The inevitable loss of a loved one is an uncomfortable subject. Planning how to cover the cost of a funeral means going through difficult thoughts, emotions and conversations.

It’s much easier to talk about covering food and energy bills and how they impact family finances than it is the sizeable expense of a funeral.

However, such reluctance to confront the matter can cost a family thousands of pounds of needless expense.

Funeral costs have almost doubled in a decade and they continue to rise quickly. Only by planning ahead and investing a small amount of money now can those thousands of pounds be kept in the family purse.

There are two popular options which help cut the costs of funerals – a funeral plan and over 50s life insurance.

Each product is based on forward thinking and prudence. Both are regularly used for funerals by families throughout the UK, but they differ hugely in the way that they accommodate the need to pay for funerals.

Here we compare and contrast the choices and solutions that each presents.

Over 50s life insurance

Over 50s life insurance is not designed to meet the full costs of a funeral, and such policies do not guarantee to do so.

Designed for UK residents aged between 50 and 80 years old, they are an affordable way to leave a cash sum for loved ones to spend when they’re no longer around.

How loved ones choose to spend it will be up to them when the policy comes to fruition. One can stipulate how they prefer the money to be spent and therefore it may be put towards funeral costs, if those wishes are observed.

However, the recipients of an over 50s life insurance pay out are perfectly entitled to treat it as a gift and spent their cash windfall however they like.

Some over 50s insurance plans offer an additional funeral benefit option. While not a funeral plan, the option presents an opportunity to ensure a fixed sum is put towards funeral costs.

Funeral benefit amounts are typically between £200 and £500 and policies offering these benefits often incorporate an option to express some outline wishes regarding funeral arrangements.

Over 50 life insurance plans can be arranged from around £5 to £50 per month and they promise a fixed lump sum pay out.

Monthly premiums are payable until the point of death, or often alternatively until a 90th birthday. This means the money paid in to an over 50s life insurance plan may exceed the money paid out, depending on the longevity of the policy holder.

Furthermore, with funeral inflation running at around six percent a year it is unlikely that the total amount an over 50s life insurance plan pays out will cover all or even the majority of the cost of a funeral taking place in the future.

A funeral plan

A funeral plan allows you to pre-pay your future funeral costs at today’s prices and if the money is available, a prepaid funeral plan is typically a cheaper option than over 50s life insurance.

With funeral inflation at approximately six percent per year the cost of a funeral in 20 or 30 years’ time can be estimated modestly to be in excess of £10K. Rest Assured’s funeral plans can be purchased for less than £2700.

The price of a funeral plan can be either covered with a one-off payment, or monthly instalments. The monies paid are held in a trust fund, alongside other customers’ payments, and invested in low to medium risk investments approved by the Financial Conduct Authority.

Once the full sum has been paid, a funeral plan covers the cost of important funeral arrangements such as a church service or cremation, a hearse and limousines, fees for the funeral director and coroner, and a viewing of the deceased. The exact package differs according to the plan purchased.

The added benefit of a funeral plan is that it also removes the emotional difficulties experienced by family when arranging a funeral. All fine detail of a funeral is expressed, noted and observed to the greatest possible degree when purchasing a funeral plan.

When the time comes, family members need just make one phone call to their funeral plan provider and everything is taken care of by the funeral director, as detailed in the funeral plan.