Pre funeral costs help.

[dayday]

I need a little help here, my Dad told me today, he and my mum pay £125 per month for there funeral costs, they have been into this scheme for 10 years.

 

Made worse if they stop paying they get nothing, this sounds terrible and to me this  is one big scam.

 

Is there anything I can do to help them, thanks in advance

[Countryfox]

18 minutes ago, dayday said:

I need a little help here, my Dad told me today, he and my mum pay £125 per month for there funeral costs, they have been into this scheme for 10 years.

 

Made worse if they stop paying they get nothing, this sounds terrible and to me this  is one big scam.

 

Is there anything I can do to help them, thanks in advance

 

If an agreement is in place get a solicitor to have a look ...

 

And see if you can cash it in before they pass away ...  

 

Send a letter to the Daily Mail ..

 

See if you can freeze the polcy ..

[Buce]

27 minutes ago, dayday said:

I need a little help here, my Dad told me today, he and my mum pay £125 per month for there funeral costs, they have been into this scheme for 10 years.

 

Made worse if they stop paying they get nothing, this sounds terrible and to me this  is one big scam.

 

Is there anything I can do to help them, thanks in advance

 

Definitely see a solicitor.

[stripeyfox]

32 minutes ago, dayday said:

I need a little help here, my Dad told me today, he and my mum pay £125 per month for there funeral costs, they have been into this scheme for 10 years.

 

Made worse if they stop paying they get nothing, this sounds terrible and to me this  is one big scam.

 

Is there anything I can do to help them, thanks in advance

Whether it is a "scam" or not, I'm not sure, but I believe this is how most of these pre paid funeral things work. You start paying a monthly amount - I you die with only 8 months contributions in then you get the full payout (even though you may not have paid in "enough"), but you then just carry on paying. If you stop paying then you break the agreement and you get nothing, so you're understanding is more or less correct.

 

£125 / month seems like quite a lot though! 

 

I guess an average funeral and associated costs could run to £3 - £4K, so after 10 years of contributions you're parents have more than paid their due, but like insurance it's money down the drain if you don't claim (in this case claim = dying). But the industry (and I lose that term loosely) is almost totally unregulated.

 

Might be worth looking on MoneySavingExpert for some advice, but my fear is that they are stuck paying in.

 

https://www.moneysavingexpert.com/family/prepaid-funeral-plans/#needtoknow-4

 

 

[stripeyfox]

Just saw this:

Do they have a "funeral plan" or an "over 50's life plan"?

 

1. Don't confuse funeral plans with over-50s life insurance plans

   We're not a fan of over-50s life insurance plans, where for most people you end up paying in far more than you would get out. There has also been much consumer confusion following misleading promotion of them, over how much they could deliver, especially regarding funeral costs. 

   Funeral plans are different. That's because you can pay in one go up front, or a set amount each month for a set period of time (typically for up to five years or less) – so there don't have to be any ongoing payments for life. Also, once bought, certain basic services you want in your funeral are guaranteed to be provided. The rest, depending on the contract, may be partially paid.  

[dayday]

41 minutes ago, stripeyfox said:

Whether it is a "scam" or not, I'm not sure, but I believe this is how most of these pre paid funeral things work. You start paying a monthly amount - I you die with only 8 months contributions in then you get the full payout (even though you may not have paid in "enough"), but you then just carry on paying. If you stop paying then you break the agreement and you get nothing, so you're understanding is more or less correct.

 

£125 / month seems like quite a lot though! 

 

I guess an average funeral and associated costs could run to £3 - £4K, so after 10 years of contributions you're parents have more than paid their due, but like insurance it's money down the drain if you don't claim (in this case claim = dying). But the industry (and I lose that term loosely) is almost totally unregulated.

 

Might be worth looking on MoneySavingExpert for some advice, but my fear is that they are stuck paying in.

 

https://www.moneysavingexpert.com/family/prepaid-funeral-plans/#needtoknow-4

 

 

My Dad pays £65, my Mum £60, surely this cant be right, how on earth is this aloud to happen in these present times?

[stripeyfox]

2 hours ago, dayday said:

My Dad pays £65, my Mum £60, surely this cant be right, how on earth is this aloud to happen in these present times?

it depends on the plan they signed up for. I think a "funeral plan" as sold by the Co Op and like is like a savings account which has a "cap". you pay in every month and whatever you've saved goes against your funeral costs. When you get, say £5K in the pot, you don't need to pay any more in.

 

The "over 50's" plans as sold on TV ads and endorsed by Micheal Parkinson etc are different. You pay in what you pay in and as long as you carry on paying they cover the funeral costs (be worth checking what is actually covered though as some just cover the "basic" funeral). If you stop paying, the plan ends. It's usually a very bad investment but older folk are drawn in by the "no medical questions" hook.

 

How old are your folks? If they're still in reasonable health and you as a family could stand the costs of an "unexpected" funeral then it might be worth just writing it off and chucking the money into a savings account. If they have signed up for his type of plan then I doubt they will ever see back what they've paid in. I'm not saying it's right by the way, it's a totally unregulated market, but I fear they may have lost the money they paid in

 

[Parafox]

2 hours ago, stripeyfox said:

 it's a totally unregulated market, but I fear they may have lost the money they paid in

 

This is a big problem that the Gov need to address. "Insurance companies" target middle 50's to 60's people, offering cheap insurance that will pay out £20,000 or whatever, that they say will cover their funeral costs if you die within the length of the contract and it seems like this is what the OP's parents have fallen for. It's usually a fixed term deal and after the fixed term is over and you're still alive, you lose that cover and the money they've paid in is lost as well. 

Usually, the cost of the installments almost always exceeds the amount paid out because people live beyond the end date of the policy.

An absolute rip-off but not outside the law yet.

Still, on the plus side, you get a free pen.

[Sir Shep]

Who is the company they are paying? They should only be paying in about £10 each at most, really does sound excessive and they should be shamed into refunding your folks. 

[Sir Shep]

I should also say that if they think they’ll be around for another 10 years or more (as I’ve no idea how old they are) that they should cancel the plan and put the money aside instead, even if it means losing what they’ve put in already. 

 

[smudger63]

My brother passed away, a week before christmas, and he had an over 50s funeral plan with the post office, which was only nine pound something. 

and the plan yielded just under £3,500, which was enough for a decent send off.

£125 a month sounds massively excessive to me.

[Grebfromgrebland]

Sounds like a life policy rather than a funeral plan. Unlikely to be any come back on this.

 

I think you'd be wise to ensure their Wills are favourable and knock them off. After all think about all those potentially wasted premiums. I'm sure they'll agree, no one likes to throw money down the drain.

[stix]

5 hours ago, Grebfromgrebland said:

Sounds like a life policy rather than a funeral plan. Unlikely to be any come back on this.

 

I think you'd be wise to ensure their Wills are favourable and knock them off. After all think about all those potentially wasted premiums. I'm sure they'll agree, no one likes to throw money down the drain.

 

Bit extreme!

[Jon the Hat]

On 07/04/2019 at 19:52, Parafox said:

This is a big problem that the Gov need to address. "Insurance companies" target middle 50's to 60's people, offering cheap insurance that will pay out £20,000 or whatever, that they say will cover their funeral costs if you die within the length of the contract and it seems like this is what the OP's parents have fallen for. It's usually a fixed term deal and after the fixed term is over and you're still alive, you lose that cover and the money they've paid in is lost as well. 

Usually, the cost of the installments almost always exceeds the amount paid out because people live beyond the end date of the policy.

An absolute rip-off but not outside the law yet.

Still, on the plus side, you get a free pen.

Is it a Parker?  That could swing it.

[Jon the Hat]

The next miss-selling scandal I expect.

[joachim1965]

33 minutes ago, Jon the Hat said:

The next miss-selling scandal I expect.

Can't claim owt back when your dead.