Life Insurance vs funeral plans

Over 50s life insurance and funeral plans are two popular options people often consider when deciding how best to help their loved ones after their death. Each has specific advantages, so we’ll take a closer look at life insurance vs funeral plans to help you decide which is right for you. 

For more information about our Over 50s Life Insurance plan, watch our video:

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A life insurance plan is designed to look after those nearest to you. So, when you pass away, your loved ones can receive support in the form of a financial payout, or a sum assured, to help them through a difficult period.

Our Over 50s Life Insurance is designed for people over 50 years old who want to provide financial security to their families in preparation for the end of their life. Nobody likes to think about dying, which is why we’ve created a plan that’s purpose-built to provide you with peace of mind for the future.

If you’re aged between 50 and 80 and living in the UK, you can take out Over 50s Life Insurance with us. You don’t need to fill out any complex forms or provide your medical history – we only ask for your age, if you are a smoker, and what level of cover you’d like. We guarantee you’ll be accepted with no further questions asked.&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;/p&gt;</p>

<p>We also offer you the option to nominate Coop Funeralcare as your funeral provider, which means you</p>

‘ll get up to an extra £250 for your funeral service</p>

on top of your sum assured, so your family has one less thing to worry about when the time comes.

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about the cost? Don’t be! Our plan is designed to be affordable, and you can choose from a range of premiums from as little as £10 up to £50 per month. To find out how much your cover could be, we can provide you with an instant quote on our website.

When you take out a plan, you’ll pay premiums monthly until 30 years have passed or until you reach age 90, whichever comes first. After this, you’ll stop paying, but your cover will remain in place, and we’ll look after your sum assured until the time comes for your family to make a claim. We also guarantee that we’ll never change your premium amount, meaning there’ll be no surprise increases along the way.

Make sure you let your family know that you have taken out life insurance, so they know to contact us when you pass away. We understand how difficult it can be to lose a family member, so our Member Services team is on hand to provide your family with tailored support to ensure the claims process is as smooth as possible. To make things easier, you may wish to include this information in your will, so we can ensure your sum assured reaches the right hands. We’ve paid out 100% of Over 50s Life Insurance claims, so you can rest easy knowing that every single penny of your sum assured will reach your family.

At Shepherds Friendly, our members always come first. From the moment you open a plan, you become one of our members, and we’ll do everything we can to ensure your needs are met. We appreciate that circumstances can change, so we do offer the option to decrease your monthly premium if you need to; however, please note that this will reduce the sum assured you were quoted when you opened the plan.

We’ve been supporting our members with their personal finances since 1826, providing them with valuable peace of mind when it comes to planning their financial future. Open a plan with us today and become a part of the Shepherds Friendly Society.

What is over 50s life insurance?

Over 50s life insurance is a policy designed for individuals aged 50 to 80, providing a guaranteed tax-free cash payout upon your death. This lump sum can help your loved ones cover at least some funeral expenses or manage unexpected bills, offering peace of mind and financial support when it’s needed most.

Typically, you decide on a monthly payment amount for your life insurance policy. With Shepherds Friendly, contributions start at just £10 per month, with the option to pay up to £50.

If you have loved ones such as a partner or children, over 50s life insurance could give them a helping hand once you’re gone. 

What is a funeral plan?

A funeral plan is a straightforward way to plan and pay for your funeral in advance. By covering upfront costs, you can help your loved ones avoid unexpected costs when the time comes. Additionally, a funeral plan allows you to specify every detail of your funeral, from the type of service and location to music, readings, or other personal touches.

Many plans provide flexibility to pay in instalments to spread out the cost over time. Plus, it offers peace of mind, knowing that everything is arranged and accounted for, sparing your family from extra stress during a difficult time.

Common questions when deciding on a life insurance or funeral plan

How expensive is a funeral?

As of 2024 research by Co-op, the average cost of a basic funeral in the UK is approximately £3,740. This covers expenses such as funeral director fees, third-party costs, and the burial plot. However, the overall cost can vary significantly based on factors such as the location of the burial and any personal wishes you may have. For example, an elaborate service, special transportation, or unique memorials can increase the total cost.

Do over 50s life insurance policies cover funeral costs?

Over 50s life insurance plans give family members a cash lump sum which can be used to help cover funeral costs. It can also be used towards any other end of life expenses, like bills or outstanding debts, making this a more versatile option than a funeral plan.

Additionally, our Over 50s Life Insurance plan has the option to opt-in for additional funeral support. When you start your application, you’ll be asked whether you want to opt-in to the Funerl Benefit Option. This gives you up to a £250 discount on your funeral costs on top of your Over 50s Life Insurance cover when you choose Co-op Funeralcare, a UK based funeral care provider.

What is a funeral plan?

A funeral plan is a simple way to plan and pay for your funeral in advance, allowing you to cover all of the costs upfront so that your loved ones won’t risk facing any unexpected costs in relation to your funeral. It allows you to decide how you want your funeral to be.

How do you pay for a funeral using the life insurance payout?

If you’d like your beneficiary to use the life insurance payout for your funeral, it’s important to share your wishes with them early on through an open and honest conversation. Keep your preferences clear by writing down your funeral plans so your wishes are known after you’re gone. Any remaining funds from the payout can then be used to cover other expenses, such as outstanding debts or unexpected bills.

Can you have over 50s life insurance and a funeral plan?

It is possible to take out over 50s life insurance and a funeral plan at the same time. This may be a good option if you want to guarantee that the upfront costs of your funeral are paid in full, plus leave some money behind to cover any additional bills or debts.

Is the beneficiary of life insurance responsible for my funeral costs?

No, the beneficiary of your life insurance is not legally obliged to cover your funeral costs. However, they can choose to use the payout from the policy to help cover these expenses if they wish. If the customer chooses the Funeral Benefit Option, we pay out directly to Co-Op Funeralcare.

However, it’s important to consider your budget and consider whether you’re able to afford both life insurance and a funeral plan. As cancelling insurance is a significant decision that needs careful evaluation.

Another option may be to consider an over 50s life insurance plan that offers a Funeral Benefit Option, like the plan offered by Shepherds Friendly. In this case, the cash payout is used towards funeral costs by Co-op, who will provide a discount on funeral costs. 

What is the difference between over 50s life insurance and a funeral plan? 

The key difference between over 50s life insurance and a funeral plan is that a funeral plan is specifically designed to allow you to pay the upfront costs of your funeral in advance.

Alternatively, over 50s life insurance pays out a cash lump sum to your loved ones when you die, which can be used to pay towards expenses such as a funeral. However, the cash payout does not have to be specifically used to cover funeral costs and may be used to pay outstanding bills and debts.  

Life insurance vs funeral plans at a glance

Over-50s life insurance:

• Provides a tax-free cash lump sum to your loved ones after your death.
• The payout can be used for anything – funeral costs, bills, or debts.
• It does not guarantee full coverage of funeral expenses as the payout amount may vary.

Funeral plan:

• Specifically designed to pre-pay and plan for your funeral in advance.
• Covers the upfront costs of your funeral, including specific details like the type of service.

Over 50s life insurance vs funeral plans: which is the right choice for me?

Over 50s life insurance and funeral plans both offer different benefits. Deciding which is right for you depends on your situation and what you wish to achieve. 

Pros and cons of Over–50s Life Insurance

• Pays out a guaranteed, tax-free cash lump sum to your loved ones, even if you pass away earlier than expected.
• Offers flexibility in how the money can be used and can cover all different kinds of end-of-life-expenses.
• Downside: The cash payout might not cover the cost of a funeral, so this needs to be considered. Additionally, the beneficiary is not legally required to use the lump sum to cover your funeral costs.

Pros and cons of a funeral plan

• Best for those whose main concern is pre-paying for their funeral.
• Guarantees upfront coverage of costs and allows you to plan the details of your funeral in advance.
• Downside: If you pass away before fully paying off the plan, your loved ones will need to cover the remaining balance. Also, other end-of-life-expenses won’t be covered by your funeral plan.

Our key takeaway

• A funeral plan is ideal for those wanting guaranteed funeral cost coverage and full control over the arrangements.
• Over-50s life insurance may be better for covering a wider range of expenses and providing financial support in unexpected situations.

Be sure to read through our plan summary and terms and conditions. Remember that when you invest, your capital is at risk.