Over 50s plans failing to cover funeral costs

5 February 2018

Millions of families using over 50s plans to cover the cost of a funeral could find themselves with a hefty bill when their loved ones die, according to new research from Co-op Funeral Care.

Over-50s plans are a form of life insurance that pay a fixed lump sum when you die. There is no medical underwriting and all applicants that meet the age criteria (typically 50-85) are accepted.

According to Co-op, 78% of people taking out the plans do so to cover the cost of their funeral. However, it is warning that pay outs will often not be enough to cover the bill, with average policyholders facing a £1,525 shortfall.

More than half of the people relying on the plan to cover the costs of their funeral were not aware that there was likely to be a shortfall.

Each year 380,000 adults take out over 50s plans. The policies should in theory provide reassurance to the one in eight UK adults that have no savings at all and the one in four that has less than £1,000 put away.

However, for many of these individuals a funeral plan that is specifically designed to cover the costs of undertakers, burials or cremations and other associated costs could be a better option. Yet the Co-op research found there was a lot of confusion surrounding what the different policies were for and what they covered.

A quarter did not understand the difference between over 50s plans and funeral plans and one in five thought an over 50s plan was a cheaper alternative to a funeral plan. More than a third (37%) also liked the fact that they could pay for their over 50s plan in monthly instalments rather than paying a lump sum upfront, yet this option is also often available with funeral plans.

Matt Howells, managing director of Co-op Legal and Later Life Planning, comments: “Our research shows that many people take out over 50’s plans to cover the cost of their funeral, but are unaware that some over 50’s plans are not linked to inflation. This means that it’s more than likely that loved ones will be left with a financial shortfall to cover the cost of the funeral.

“What is more, people opting to pay for their over 50’s plan because it’s a way of spreading the cost, may not have thought about other options such as those funeral plans which cover the full cost of a funeral, and offer a monthly payment option at the same time.”

However, even though funeral plans may be a better option that an over 50s plan, it’s still important to shop around and do your research as there are vast differences in the products available.

In July last year, a report from Fairer Finance claimed providers often use pushy sales tactics and that buyers often do not understand what they are buying, with not every policy guaranteed to meet all costs.

Co-op highlights the difference between funeral plans and over 50s plans:


 Pre-paid funeral plansOver 50's cover
Can I pay monthly?Yes Yes
Does it protect against funeral inflation?YesNo
Is it clear what funeral costs will be covered?Yes (Shop around as funeral plan providers vary)No
Will I get to specify my wishes to get the send-off I want?YesNo
Does it offer support to me and my family from when I buy the plan to the delivery of my funeral?YesNo
If I cancel, will I get my money back?Yes (less a cancellation charge see T&Cs)No (dependent on the insurance provider)
Is a medical required?NoNo
Is the pay-out guaranteed to be put towards paying the cost of my funeral?YesNo

Source: Co-op, February 2018.



In reply to by anonymous_stub (not verified)

These over 50s plans are an absolute rip off my parents signed up years ago and are now well out of pocket and the money won't even cover the costs of there funerals. They are not explained properly and the commercials on the tv make them sound so good! Funeral plans are the best way.

In reply to by anonymous_stub (not verified)

I purchased Coop funeral plans outright for my wife and self some time ago - Will these be affected (These are not Over 50s plans)

In reply to by anonymous_stub (not verified)

My mother paid into an over-50's plan. She lived a long time after starting and eventually stopped paying when the insurance company had almost twice as much as would be paid out. We paid for her funeral and it cost more than the payout. Funeral plans are far fitter for purpose.


watch out for rip off funerals. you can get good deals. check out first. reviews

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