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. 

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 – such as any 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 bear in mind 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.