Children’s funeral cover – how providers compare
In reading this article you will understand
- How critical illness plans can help clients cover the cost of a child’s funeral
- Which providers and which of their products offer this benefit
- How much those providers pay
Organising a funeral for a loved one is stressful at the best of times because you are trying to deal with the practicalities surrounding the loss of that person while the grief is raw. However, arranging a funeral for a child takes this to a different level. It is something no parent expects to do as it is not the way it is ‘supposed to be’. However, some children do sadly pass away as a result a serious illness and ‘getting their angel wings’ can trigger a range of emotions in parents, from intense pain and sadness, to anger, or relief that their child’s suffering is over.
Any client going through this kind of emotional rollercoaster will want to ensure that the funeral is a fitting tribute to their beloved child, even though they may be struggling to get out of bed in the morning as they try to come to terms with their loss.
Life will be tough enough during the early stages of the grieving process, without other worries weighing on their mind, such as whether they can afford the kind of funeral they want to give their child. This is why some providers of critical-illness insurance provide funeral cover for children as part of the value-added benefits they offer. In this insight we look at which insurers offer this benefit and how much they will pay towards the cost of a child’s funeral.
Before we look in detail at the data supplied by critical illness insurers, it is worth noting that clients in England, Wales or Scotland will not be charged fees for a standard burial or cremation by their local authorities for children under the age of 18.
According to the Money Advice Service website, in England, the government will also contribute £300 towards the price of a coffin, casket or shroud through the Children’s Funeral Fund. This is not means tested, so it does not matter how much someone earns or how much savings they have.
However, families will need to pay for these things initially and then reclaim the cost, either directly or through the funeral director if they are using one. There is also a time limit to claim – up to six months after the funeral – which is not long considering that thinking about these kinds of things may not be uppermost in the minds as they try to heal and move forward with their lives.
Funeral director fees, the cost of flowers and a memorial are not covered by the government as a rule, but those on low incomes or receiving certain state benefits may be able to get extra financial support from the government’s Funeral Expenses Payment – even those in Northern Ireland. If families are not eligible for this payment, they will need to foot the bill for the extras themselves and this is where the financial support provided by insurers comes into its own.
A quick search of the internet reveals that children’s memorials can range from several hundred pounds to upwards of £2,000, depending on the design families choose, while funeral director fees typically start at over £1,000. The costs of flowers will vary depending on the design, type of flower and extras such as teddy bears, but £45 to £150 per arrangement seems to be a good ball park figure – although some of the more sophisticated designs will cost upwards of £400 each. So even with a bit of financial help from the government, many people will still need to find a fair amount of money to give their child the send-off they deserve.
* only if children’s cover is included
As our table shows, all 10 insurers listed provide children’s funeral cover to help bereaved families with the financial aspect of their child’s death. However, AIG and Royal London both have contracts that do not provide children’s funeral cover. The reason that the AIG Key 3 plan does not include it is that the plan doesn’t include children’s critical-illness cover. Royal London’s standard children’s critical-illness cover also lacks children’s funeral cover but this is perhaps because it is a lower cost option – the company does include children’s funeral cover on its enhanced children’s critical-illness cover.
On a similar note, it is worth pointing out that children’s funeral cover is only provided by AIG YourLife Plan, Guardian, VitalityLife and Zurich where children’s critical-illness cover is included in a client’s plan.
The monetary amount that insurers will pay towards the cost of a child’s funeral varies. As our table shows, there are two camps – one paying out £5,000 and the other paying double that.
There are slightly fewer plans paying £10,000 bracket – AIG CIC Start, AIG YourLife Plan, Canada Life, Guardian and Scottish Widows – but having said that, this still provides plenty of choice for clients at this level.
Overall, any of the providers paying out £10,000 to cover the cost of a child’s funeral will be worth considering. However, advisers tasked with putting suitable cover in place to protect a client’s children will also need to be mindful of a client’s budget. It may be that some of the enhanced options for children’s cover which are more likely to provide more funeral cover cost more than the client is willing or able to pay – in which case, any of the other plans that include children’s funeral cover could provide a more cost-effective option.
Things to reflect on for CPD
- Discuss this article with your peers. What are your two key learning points?
- This related Protection Guru article examines the death benefit available on income protection plans. Note the different ways funeral benefit is calculated and the maximum benefit each insurer provides. Discuss with your peers to determine who you think gives the best funeral benefit. If you differ in your opinions, say why.