The company says many people take out whole of life plans to cover funeral expenses, but inflation and the rising cost of funerals can mean there is a shortfall. With funeral plans, funeral arrangements can be made in advance and paid for at today’s prices, but these products are unregulated.
The premiums paid in to the Golden Charter plans will be invested in one of two ways, depending in how payment is made. Where payments are made through a lump sum or instalments, premiums are invested into an independent trust and the proceeds are used to pay for the funeral. The plan can be transferred to someone else, such a family member, if they die first. There is also no age requirement for this type of plan.
Those opting to pay on a fixed monthly basis – which is available only to people age 50 to 75 – will pay premiums that depend on gender, age, and smoking status. Premiums are paid into a whole of life policy and this type of plan cannot be transferred to anyone else.
The four plans offer different levels of benefits to suit different budgets. The lowest level, the 50+ base plan, fully guarantees the cost of the funeral directors’ own services and does not cover third-party costs such as cemetery/crematorium fees or clergy fees. The three other plans provide an allowance towards third party costs and additional benefits, but none of the plans include burial costs as these vary between regions.
IFAs have access to three Dignity pre-paid funeral plan options through Legal & General. These options are the chiltern, malvern and highland, which cost £2,710, £2,955 and £3,290 respectively, making them less expensive on both a lump sum and instalment basis than the three comparable Golden Charter options. Fixed monthly premiums are at a flat rate of £52.13, £56.84 and £63.29 respectively with Dignity/L&G, but other payments options are available so an individual quote will be needed to compare costs and benefits between both companies.