Methods of Payment
Prepayment plans
A funeral pre-payment plan is exactly what it says. It is when someone pre-pays for their funeral.
This is often done because the person wished to relieve the financial burden on their family and they may wish to have the peace of mind that everything is organised when the time comes.
A person will pay into the plan until such time as the funeral cost is covered. This usually means the funeral director is already chosen and will have details of the service which was wanted. If your relative or friend had spoken of a funeral plan, then you would need to find the provider, perhaps through bank statements or documents, and contact the provider who will then help you through the process.
It is important to bear in mind that it may not cover the full costs, but it will certainly help. It is always best to check if your relative/friend had a plan in place, just in case they haven’t mentioned it to you or it is not obvious, it is always worth checking
Insurance policies
There are insurance products that are paid for during life that can be used to help the deceased’s family pay their funeral costs.
These products vary in the level of the pay-out they provide and what they may cover.
So if you are looking to take one out, please read the small print carefully.
What is covered varies from one provider to the next. Some may cover just the funeral directors fees, others may cover the wake, so always make sure you read the terms carefully.
Life Insurance pays out when someone dies, and this lump sum may be used to pay for funeral costs but this would not be guaranteed. To ensure the money is used for the purposes of funeral costs, there is the option of a life insurance written in trust, where it can be specified that you wish a specified amount to be used for funeral costs. Again policies vary, so please ensure all terms and conditions are checked carefully.
Is for those who are over 50 and under 85, and who perhaps wouldn’t qualify for other life insurance policies. This kind of policy is used often by people for funeral costs, as it is a fixed amount paid out when you die no matter when that is.
This amount may not cover the total costs. Some providers of over 50s policies can allocate a specific amount for funerals which can then be paid straight to a funeral director when someone dies, although this is likely to be a smaller amount.
As with the other options, all policies are different and each one needs careful checking over to ensure it is appropriate for you and your family.
from the deceased's estate
Everything that is owned by a person who has died is known as their estate. This is usually left to family and friends. Often a person has a will which makes the sorting out of the estate much simpler.
The estate can be used to pay for funeral costs, the main issue being how to do this. If a bank account is frozen, it can be possible for the bank to release funds for funeral costs, but usually a death certificate, ID and an invoice for costs would need to be shown.
If there are secured debts such as mortgage they’d need to be paid first and this can take longer. A funeral cost would be paid after these before any further unsecured debts though. If it is taking time to release funds from the estate, or you have to wait for property to be sold, it could be worthwhile negotiating with the funeral director to allow an instalment plan to be put in place, so you can commit to smaller amounts until the funds are made available to you. The most important thing to remember is to keep all invoices and receipts, as you will need these to have funds released or paid back to you.
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*Caledonia Funeral Aid CIC is a social enterprise managed by Community Renewal Trust
Caledonia Cremation is part of Caledonia Funeral Aid CIC – a social enterprise managed by Community Renewal Trust
