What is funeral insurance?

Funeral insurance is life insurance specifically designed to cover funeral and burial costs, ensuring your family doesn't face financial burden when you die.

Also known as funeral cover or burial insurance, it's a type of life insurance policy that pays out a tax-free cash lump sum to your beneficiaries when you die. The payout is typically used to cover funeral expenses, which average £4,000-£9,000 in the UK.

What funeral insurance covers:

• Funeral director fees (£2,000-£3,000)
• Cremation or burial costs (£1,000-£5,000)
• Coffin and transportation
• Flowers, order of service, and other arrangements
• Wake or memorial service
• Headstone or memorial plaque
• Outstanding debts or final expenses

Unlike a funeral plan (which pre-pays specific funeral services), funeral insurance pays cash to your family who then decide how to spend it. This provides more flexibility.

Types of funeral insurance

Over 50s Life Insurance vs Standard Life Insurance

Feature	Over 50s Life Insurance	Standard Life Insurance
Acceptance	Guaranteed (ages 50-85)	Based on health/medical questions
Medical questions	None	Yes - full health assessment
Cover amount	£3,000 - £20,000	£50,000 - £1,000,000+
Qualifying period	12-24 months (premiums refunded if death within period)	Immediate full cover
Cost	Higher per £1,000 of cover	Cheaper per £1,000 (if healthy)
Best for	Over 50s with health issues or wanting guaranteed acceptance	Younger/healthy people wanting larger cover or immediate protection

Both types pay out tax-free cash lump sums to beneficiaries.

Over 50s life insurance:

• Guaranteed acceptance - no medical exams or health questions
• Available for ages 50-85
• Cover limited to £3,000-£20,000 (enough for most funerals)
• 12-24 month qualifying period (premiums refunded if natural death within period)
• Fixed monthly premiums paid for life
• Ideal if you have health conditions or have been declined elsewhere

Standard term life insurance (for funeral cover):

• Requires medical questions/health assessment
• Available from age 18 upwards
• Cover from £5,000 to £1,000,000+
• Immediate full cover (no qualifying period)
• Cheaper than over 50s plans if you're healthy
• Best if you're under 50 or in good health

How much does funeral insurance cost?

Funeral insurance costs £10-£50 per month depending on your age, health, and the amount of cover you choose.

Example monthly costs for over 50s life insurance (£5,000 cover):

- Age 50: £12-18/month

- Age 60: £18-28/month

- Age 70: £28-42/month

- Age 80: £50-75/month

Example costs for standard life insurance (£10,000 cover, 10-year term, healthy non-smoker):

- Age 30: £4-6/month

- Age 40: £6-10/month

- Age 50: £12-18/month

Factors affecting cost:

• Age (older = higher premiums)
• Health and medical history (standard life insurance only)
• Smoking status (smokers pay 50% more)
• Cover amount (more cover = higher premium)
• Policy type (over 50s costs more per £1,000 than standard)

Important: With over 50s life insurance, you pay premiums for life. Over time, you may pay more in premiums than the payout. For example, paying £30/month for 15 years = £5,400, for only £5,000 cover.

Funeral insurance vs funeral plan

Funeral Insurance vs Funeral Plan

Feature	Funeral Insurance	Funeral Plan
Payout	Cash lump sum to family	Pays funeral director directly
Flexibility	Family chooses funeral	Funeral services pre-arranged
Payment	Monthly premiums (ongoing)	Lump sum or installments (fixed period)
Protection from inflation	No - fixed cash amount	Yes - services guaranteed
Other uses	Can cover debts, inheritance	Only funeral costs
Best for	Flexibility, covering extras	Locking in today's funeral prices

Many people have both - a funeral plan for the funeral itself and life insurance for extras.

Funeral insurance advantages:

• Flexible - family decides how to spend the money
• Can cover extras like wake, flowers, headstone
• Can help with debts or provide small inheritance
• Available with guaranteed acceptance (over 50s plans)
• Can start with low monthly premiums

Funeral plan advantages:

• Protection from funeral price inflation
• Specific funeral arrangements guaranteed
• No qualifying period - immediate protection
• One-off payment (or fixed installments) - no lifetime premiums
• Peace of mind - everything arranged in advance