How is my money secured? –  Funeral plans explained

One of the most commonly asked questions about funeral plans is how funeral directors are able to offer tomorrow’s funeral plans at today’s prices and still make a living. Here we explain the mechanics of a funeral plan and what makes it the safest and most lucrative way to ensure your funeral today.

Funeral Plans allow holders to pay for a funeral at today’s prices that may not take place for decades, without ever having to pay more for a Funeral Director’s services.

Once a funeral plan is fully paid it is invested into a separate trust fund. This trust fund is independent of any one funeral director or administrator and represents security in the unlikely event that any party ceases trading. Because trust funds such as these are substantial through the investment of several thousand funeral plan payments, the funds are invested and gain a sizeable return on investment through some of the UK’s top wealth management companies. This return on investment is added to the amount paid in for the plan initially so the value of each plan continues to rise without the holder having to add money to it.

If an individual were to invest the cost of a funeral plan, e.g. £3,500, in a savings account, the interest returned would be far less and would certainly be unable to keep up with the rising costs of funerals, which have soared by more than 90 per cent since 2004. However by taking out a funeral plan with a trusted funeral plan provider, regulated by the Funeral Planning Authority, this £3,500 is pooled together with millions of pounds from other plan holders to provide the opportunity to gain a much greater return on investment. What this essentially means is that a funeral, which may cost £3,500 today but £7,000 in five years, is covered no matter how much the national average cost of a funeral rises.

It is through the pooling of great number of funeral plans and the secure investment through shrewd wealth management firms that funeral plans provide such good value to customers.

To find out more about how your money is uniquely secured through a prepaid funeral plan, get in touch with Walter C. Parson Funeral Directors today on 01752 767676.