What is funeral insurance?

Funeral insurance typically refers to a life insurance policy that provides a lump sum pay out to your loved ones when you pass away.

The pay out could be used to help cover your funeral costs or towards other expenses.

It’s common to take out funeral insurance in the form of an over 50s plan, but some insurers offer specialised funeral insurance plans, like British Seniors.

Reassured can help compare funeral insurance plans for over 50s, with prices starting from £5 a month + .

In this guide:

Compare Funeral Insurance for Over 50s »

How does funeral insurance work?

Funeral insurance is an affordable way to leave a cash lump sum behind for loved ones when you pass away.

Your loved ones can choose how to spend the lump sum, but it’s commonly used to help cover funeral costs.

Here’s how funeral insurance typically works:

  • Guarantees acceptance to UK applicants aged over 50, up to the age of 80 or 85 depending on the insurer
  • Application has no medical or lifestyle questions (except for whether you’re a smoker) and there’s no need for a medical exam
  • Provides whole of life cover (guarantees a full pay out after the ‘waiting period’ has passed - this is the first one or two years from the start of the policy)
  • Immediate accidental death cover during the waiting period, providing a full pay out if you pass away due to an accident during this period
  • Requires monthly premium payments until you pass away or reach a specified age (such as 90). Premium costs are determined by your age, smoking status and cover amount

Other benefits and features:

  • Add-on the free funeral benefit option to receive an extra contribution (up to £300) towards your funeral costs
  • Write your policy in trust to help protect your pay out from inheritance tax (charged at 40% if your estate is liable) and ensure a faster pay out for your loved ones
  • Policies are regulated by the Financial Conduct Authority (FCA), which means you’re protected in the unlikely event your provider can’t pay a valid claim

Please note: Funeral insurance is different to a pre-paid funeral plan as it doesn’t involve pre-arranging or pre-paying your specific funeral services in advance.

Types of funeral insurance

There are two main types of funeral insurance policies. Here we outline the key differences between both:

Over 50s life insurance

  • Offers up to £20,000 of cover depending on your age, lifestyle and the insurer
  • Can only be taken out as single policy (to cover one person)
  • Fixed monthly premiums
  • Available through Reassured from £5 a month

Funeral insurance plan

  • Provides several cover options to choose from depending on the type of funeral you require (typically up to £10,000 depending on your age, lifestyle and the insurer)
  • Could be taken out as a joint policy (to cover two people)
  • Fixed monthly premiums (unless you opt for the increasing cover option)
  • Not available through Reassured

What does funeral insurance cover?

Funeral insurance is designed to help towards funeral costs and other expenses, depending on how much cover you take out and how your family wish to spend the money.

Unlike a pre-paid funeral plan, a funeral insurance policy isn’t attached to a nominated funeral director or any specific funeral services.

Instead, it pays out a cash lump sum that could help with:

  • Paying for your funeral (for example, helping to cover cremation or burial fees, funeral director fees, a coffin, hearse and flowers)
  • Unpaid debts and bills
  • Living costs for dependents
  • Inheritance tax (if the policy is written in trust)

While funeral insurance offers some flexibility for your loved ones, it’s not guaranteed that you can take out the level of cover you need for the full cost of your funeral.

However, having at least some protection in place can help ease the financial burden when the time comes.

How much funeral insurance do you need?

When calculating how much cover you may need, you may want to consider the average cost of a basic funeral which is £4,414 in the UK[1].

The average total cost of dying is currently £9,658, which includes other funeral related costs, including flowers, a memorial and venue hire.

You could take out enough funeral insurance to help cover a basic funeral or you may wish to take out a higher level of cover to help towards other costs.

As mentioned, the maximum cover amount available through Reassured is £20,000 depending on your age, smoking status and budget.

Tip: You may also want to factor in rising funeral costs when deciding how much cover you need. Due to inflation, the price of a funeral in the future may be much higher than that of today. According to SunLife, average funeral costs have increased 126% since 2004. Therefore, to ensure that your family have sufficient funds when the time comes, you could take this into account when securing your funeral insurance.

Funeral insurance calculator

Use our handy calculator to add up the costs you’d like your funeral insurance policy to cover.

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According to Uswitch, it’s estimated that 23,000 people in the UK will still be paying off their mortgage by age 75.

Although an over 50s plan can’t cover the full cost of a mortgage (as cover is capped at £20,000), it could help to contribute some funds towards keeping your family in their home.
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Research by Saga shows that nearly 6 million over 50s owe money on credit cards and loans, with average debt amongst this age group totalling £12,000.

Depending on your personal circumstances, an over 50s plan may not be able to cover all debts (as cover is capped at £20,000) but it could allow you to cover some debts in your name.
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SunLife’s Cost of Dying 2023 report found that the average cost of a basic funeral is £3,953, with the overall cost of dying totalling £9,200.

A pay out from life insurance can help to cover all or some of these costs.
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Age UK have found that many over 50s and 60s will be reliant on their pension to get by.

Life insurance can provide your partner with a helping hand on top of their pension.
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An inheritance can provide your loved ones with a cash gift to spend as they wish.

Alternatively, you could leave a portion of your pay out to a charity that’s close to your heart.
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If you already have a life insurance (or other financial protection) policy in place, and/or you have your own savings, factoring these into your sum assured could reduce the level of cover you require - helping you to save money.
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How much does funeral insurance cost?

Funeral insurance monthly premiums are determined by your:

  • Age
  • Smoking status
  • Cover amount

Over 50s funeral insurance starts from just £5 a month through Reassured.

In the table below, we’ve provided examples of how much cover you could secure for £25 a month as a non-smoker:

Age50556065707580
Sum assured£8,743£7,181£6,118£4,978£3,581£2,539£1,829

Use our award-winning comparison service to get your free, personalised quotes.

What’s the difference between funeral insurance and a pre-paid funeral plan?

There are many differences between funeral insurance and a pre-paid funeral plan.

Here we explain some of the main differences:

Funeral insurancePre-paid funeral plan
You pay a monthly premium that’s based on your age, smoking status and the level of cover you chooseComes at a fixed cost which you need to pay in full upfront or in monthly instalments (instalment fees may apply)
The pay out is made to your chosen beneficiary for them to spend how they wishThe pay out goes directly to a nominated funeral director when you pass away
Pay out is not tied to any specific costs, can be used for a range of expensesCovers the cost of specific funeral services that you choose in advance
Your loved ones will need to plan your funeral when the time comesYou pre-arrange your funeral as per your wishes, relieving this burden from loved ones
Doesn’t guarantee to cover the total cost of your funeralGuarantees to cover the total cost of services included in the plan

Pre-paid funeral plans tend to cost upwards of £4,000 and can be more expensive than funeral insurance as you’ll need to pay the fixed amount within an agreed time frame.

Funeral insurance can offer a low-cost monthly premium for a potentially larger pay out (depending on your age), making it a simple and affordable option for many.

How to find the best funeral insurance for you

Shopping around and comparing quotes can help you to find the right funeral insurance at the right price for you.

At Reassured, our funeral insurance comes in the form of an over 50s plan, which guarantees acceptance to those aged 50 - 85 and could provide up to £20,000 of cover.

The money could help to cover your funeral expenses or can be used for other things depending on your family’s needs.

We offer an award-winning broker service to help you compare quotes from top UK insurers and secure your perfect policy.

Simply click through to our online form and our expert team will be on hand to provide your free quotes.

Free Funeral Insurance Comparison » Get Our Best deal

Funeral insurance FAQs

Can you secure more than one funeral insurance policy?

Yes, it’s possible to take out multiple funeral insurance policies to secure multiple pay outs.

However, while you can have more than one policy, maximum cover limits for each insurer will still apply.

For example, if your cover limit is £10,000 with an insurer due to your age, you wouldn’t be able to secure more than this across all policies you take out with them.

However, you could take out multiple policies from different insurers if this is within your budget.

How much is funeral insurance per week?

Funeral insurance can cost from just 20p-a-day or £1.40 a week through Reassured.

However, exactly how much you’ll pay will depend on your age and how much cover you take out.

Can you get life insurance with funeral cover?

Yes, some over 50s life insurance policies come with optional funeral cover, commonly known as a ‘funeral benefit option’.

If you choose to add the funeral benefit option to your policy, it’s completely free and gives you up to £300 extra to help towards your funeral costs.

When you pass away, your over 50s life insurance pay out will go directly to an appointed funeral director who’ll carry out your funeral as per your wishes.

This could be a good option if you’re torn between taking out a funeral plan or life insurance policy. We have written a funeral benefit option guide for more details.

What is burial insurance?

Burial insurance is simply another term used to describe funeral insurance. It’s not a separate product available in the UK.

If your chosen funeral type is a burial and you want to help cover the cost, you may consider a form of funeral insurance or a pre-paid funeral plan.

Sources:

[1] https://www.sunlife.co.uk/funeral-costs/

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