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Is funeral insurance worth it?

According to research by the University of Bath, funeral costs have risen by almost 80% in the last decade. The average funeral now costs around £4,000, which doesn't include additional extras and only covers the burial and service. However, there are still help available, particularly for low income families, to help them cover the cost of funerals; with this in mind, is funeral insurance worth it, especially if you're already tight for cash?

Funeral Insurance Basics

Funeral insurance helps you plan a head to cover funeral costs and will generally cover most of what a typical funeral requires. It's highly recommended, however, to look at the different types of cover available before deciding whether funeral insurance is worth it.

For example, specialist funeral cover is available for services which may go beyond basic needs - perhaps if the deceased had specific requests or religious requirements. In this case, government grants and assistance may not cover these extra costs, and standard funeral cover is likely to only partly fund the ceremony (which usually only take into account burial fees, grave digging charges or cremation costs and organist charges at varying tiers of coverage).

Over-50 Plans

You can have funeral costs covered if you have an strong>over-50s planwhich pays a fixed lump sum upon death. Part of this sum can be used by family members to pay for the funeral, but these types of insurance plans usually require you to pay into the scheme for a long time.

Pre-Paid Funeral Plans

If you don't want to take out a life insurance policy, pre-paid funeral plans are typically the most popular type of insurance for a funeral. They allow you to pay and organise a funeral today, so they your funeral is taken care of in the future and rising cost won't affect your plan. You could, in this case, end up paying less for your funeral if inflation causes prices to go up. However, these plans can have steep cancellation fees if you cancel after the first month.

Government Grants and Avoiding Mistakes

If you're thinking about applying for funeral cover through your life insurance provider, you should make sure you avoid some common life insurance cover mistakes before you take out a policy. If you're on a low income and are thinking about whether funeral insurance is worth it, take a look at applying for government loans and grants to help cover the cost; it may be more cost effective to use government assistance than pay into a plan, although the grants and loans only cover the most basic funeral arrangements.

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