The Prepaid Plan That Does Not Cover the Cremation Fee
Mrs Ainsley, 78, comes to arrange her husband's funeral. She brings a funeral plan document taken out in 2019 with a plan provider now in run-off. The plan states it covers "professional services, a veneered coffin, hearse and one limousine, and cremation fees up to the value set out in the schedule." The schedule shows a cremation fee allowance of £640. The local crematorium's current fee is £1,015. The plan also excludes embalming, additional limousines and press notices. Mrs Ainsley assumed "everything was paid for" and has £1,200 in savings. She wants embalming, two limousines and a notice in the local paper. She is tearful and says she cannot face "arguing about money".
1. How should the arranger explain the shortfall and present the options without distressing Mrs Ainsley further?
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Acknowledge and normalise first. Confirm gently that it is very common for older plans to have fee allowances that have not kept pace, so she does not feel foolish. Do not imply the provider misled her.
State the facts plainly and in writing. The plan pays £640 toward a cremation fee that is £1,015, leaving a £375 shortfall. Embalming, the second limousine and the press notice are excluded and must be paid for separately. Give her an itemised written estimate with the plan contribution shown as a credit, so she can see the net balance.
Offer choices, not a single demand. Present a tiered set of options: (a) proceed with everything and pay the balance; (b) keep embalming and the notice but use one limousine; (c) drop embalming and the second limousine and use the savings to cover the cremation shortfall. Explain that embalming is not a legal requirement and that a notice can be placed more cheaply or handled through the funeral director's online tribute page.
Protect her dignity and time. Offer to go through the figures with a family member present, provide a cooling-off period before signing, and confirm the final balance in writing before any commitment. Signpost to bereavement support and, if money is genuinely tight, mention charitable funeral grants and the local authority public health funeral only as a last resort, framed sensitively.
2. The provider's plan terms say the cremation fee allowance is fixed and the customer bears any excess. What should the arranger check before advising Mrs Ainsley to pay the shortfall?
Read the worked answer
Read the plan terms, not the summary. Check the actual plan contract for: whether the cremation fee is a fixed allowance or a "guaranteed" benefit; whether the provider guarantees to meet the crematorium fee in full regardless of the schedule figure; and whether there is an uplift or indexation clause.
Check the FCA position. Since the funeral plan market came under FCA regulation (from 29 July 2022), providers must treat customers fairly and communicate clearly. A plan sold in 2019 may predate regulation but the provider is still subject to the regime now. If the wording is ambiguous about who bears fee increases, flag it and ask the provider in writing rather than assuming the customer pays.
Check what is actually covered. Confirm whether "cremation fees" includes the doctor's/medical referee fee (now generally abolished in England and Wales but check jurisdiction), the crematorium's environmental surcharge, and any weekend or out-of-hours charge.
Document and escalate. Record the query and the provider's response. If the provider's position is unclear or appears unfair, advise Mrs Ainsley of her right to complain to the provider and, if unresolved, to the Financial Ombudsman Service. Do not collect the shortfall from her until the position is confirmed.