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 both of them 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.
We also offer you the option to nominate Coop Funeralcare as your funeral provider, which means you’ll get up to an extra £250 for your funeral service on top of your sum assured, so your family has one less thing to worry about when the time comes.
Worried 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 type of life insurance taken out by people aged between 50 and 80 years old. It allows you to leave behind a fixed tax-free cash lump sum after your death, which can then be used by your loved ones towards any funeral costs or unexpected bills. Read our latest article about what age you should get life insurance.
No medical information is required for over 50s life insurance plans, so there’s a guarantee that your application will be accepted.
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.
Do over 50s life insurance policies cover funeral costs?
Over 50s life insurance plans provide family members with a cash lump sum which can be used to help cover funeral costs. It can also be used towards any other 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 receive the Funeral 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.
Please note, the £250 funeral payment will only apply to ‘Tailored’ funerals. If your estate opts for an ‘Essential’ funeral the benefit will be £100, and if they opt for direct cremation or burial the benefit will be £50. The Funeral Benefit Option is available to UK residents only, excluding Northern Ireland.
As well as funeral support, your loved ones will also receive access to the National Bereavement Service – a not for profit organisation that can offer counselling, guidance and support to bereaved family members.
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 also allows you to decide how you want your funeral to happen, guaranteeing that your wishes will be met.
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 full cost of your funeral in advance, whereas over 50s life insurance pays out a cash lump sum to your loved ones when you die, which can be used to pay towards any 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 cover any outstanding bills and debts.
A funeral plan, on the other hand, allows you to pre-pay all of your funeral costs and plan details in advance. This is guaranteed to cover your full funeral costs.
Over 50s life insurance or a funeral plan: which is better?
Over 50s life insurance and funeral plans both offer different benefits, and deciding which is right for you depends on your situation and what you wish to achieve.
If your main concern after your death is your paying for your funeral in advance, then a funeral plan may be the right option for you as it guarantees full funeral cost coverage and allows you to plan the funeral yourself. The downside is that if you die before fully paying off the funeral plan, your loved ones will then have to pay the remaining balance. .
On the other hand, over 50s life insurance will still pay out the full guaranteed tax-free cash lump sum if you die earlier than expected. This offers much more flexibility in terms of what the money can be used for. Therefore, it may be better suited if you’re concerned how your loved ones would cope if you died earlier than expected, or if you’re worried about other costs outside of the funeral like remaining debt or unexpected bills. However, the cash lump sum provided through an over 50s life insurance plan might not be enough to cover the full cost of your funeral, so it’s important to bear this in mind. Read our latest article about why life insurance is worth it.
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, and this may be a good option if you want to guarantee that your funeral is paid for in full, and also want to leave some money behind for your loved ones to cover any additional bills or debts.
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.
Be sure to read through our plan summary and terms and conditions. Remember that when you invest, your capital is at risk.
More information about over 50s life insurance
Important things to consider
- If your circumstances change and you stop paying the premiums, your life cover will end after three missed premiums.
- Over 50s Life Insurance has no cash in value at any time, so if you cancel it after the first 30 days you will get nothing back.
- Your life cover does not start until after the second anniversary of your plan start date, as shown in your plan illustration, unless you die as a result of an accident, in which case your life cover begins from the start date shown on your plan illustration.
- This life plan is not a funeral plan and therefore may not cover the full cost of a funeral.
- Over time, although the amount we pay out on death is fixed, this amount is likely to reduce in value because of the effects of inflation.
- If you live long enough the total premiums you have paid may be greater than the amount payable on death.
All references to taxation are to UK taxation and are based on Shepherds Friendly Society’s understanding of current legislation and H M Revenue and Customs practice which may change in the future. Please ensure that you read the full terms and conditions of this plan which are available from your financial adviser or by contacting us directly.
Please note: No advice has been provided by Shepherds Friendly. If you are in any doubt as to whether a plan is suitable for you, we recommend getting in touch with a financial adviser, who will be happy to take you through what options are available. Should you consult a financial adviser there could be a cost involved and you should confirm this cost beforehand.