Those pesky funeral plans…

Here’s a salutary tale for anyone who is seduced into buying a funeral plan in order to ‘get on with enjoying life’, or ‘protect your family from future costs and worry’ or to avail themselves of the ‘peace of mind that your funeral costs and arrangements have been taken care of’, or whatever the latest snake oil sales pitch currently in use promises..

Back in 2007, a person who wishes to remain anonymous (but who has given us permission to publish this information) decided to do the responsible thing and organise their funeral in advance.

She purchased a funeral plan from Royal London, that UK’s ‘largest mutual life, pensions and investment company’. 

She paid £3,304.53 by instalment payments for what she thought was the cost of her own future funeral. And she thought no more about it until 11 years later when she had to arrange a funeral for her best friend. 

This funeral was carried out by a small, independent funeral director, and the holder of the Royal London funeral plan was so impressed that she went back to the small, independent funeral director to ask if they would be able to carry out her own future funeral – the one she’d paid for by buying a funeral plan. She thought it was called a Dignity plan, and her understanding was that she could decide which funeral director could be used.

The small, independent funeral director spent almost two hours with her trying to work out the current value and situation of the funeral plan, including a phone call to the plan provider that lasted over an hour. The plan provider of the funeral – that had been bought from Royal London -turned out to be Dignity Funeral Plans. 

It transpired that the plan purchased in 2007 for £3,304.53 was now valued at £3,488.25. This total included £827.92 towards third party costs, i.e. the cremation fee, the doctors’ fees and the cost of a minister or officiant. 

So over 11 years, the value of the funeral plan she had bought had gone up by just £183.72. It seemed that interest was only accrued on £640 of the money she’d paid – the money allocated towards the third party costs. The remaining £2664.53 hadn’t attracted any interest at all.

Now, the person who had bought this plan wasn’t very happy with this, and nor was she happy with the fact that her funeral would be carried out by a branch of Dignity Funerals when she wanted it to be carried out by the small, independent funeral director. She particularly wasn’t happy with the way the person on the other end of the phone was speaking, and she wanted to cancel the plan there and then.

The small, independent funeral director said that she ought to go away and think it through. They said they would write to her to set out her options so that she was really sure that was what she wanted. The holder of the plan agreed, and arranged to come back in a couple of weeks once she’d had a chance to read the information that the small, independent funeral director had put together for her about the costs of cancelling and the alternative choices she would have.

A few weeks later, and even more determined to cancel, the holder of the plan went back to see the small, independent funeral director and confirmed she definitely wanted to cancel the plan. Because she had been so unhappy with the way the previous phone call to the funeral plan company had gone, she decided to record the phone conversation, which was on loudspeaker in the office of the small, independent funeral director.

Below is the transcript of the 15 minute phone call that took place. 

Bear in mind, this is a call to a branch of the UK’s self-proclaimed ‘Leader in Funeral-Related Services.

This is how they describe themselves:

 ‘Our funeral directors date back to 1812 and last year we conducted 68,800 funerals, with 99% of families we served saying we met or exceeded their expectations. As a financially stable company, with a long reliable history, we have the stature and capability to stand behind the guarantees made to every Planholder. Funerals are all we do, so you’ll be in experienced hands from the moment you take out a funeral plan to the moment your loved ones need to talk to one of Dignity’s 1,200 owned and approved funeral directors’.

Oh, and just to explain the confusion our plan holder had –  if you look at the Dignity Funeral Plans website FAQs, this is what you’ll find:

‘All Prepaid Funeral Plans from Dignity guarantee to cover the cost of the Funeral Director services and the third party cremation costs specified – these are cremation fees and Minister’s or Officiants’ fees. Some other providers only provide a contribution towards the cremation costs.’

Dialing tone

“Good afternoon, you’re through to ‘Person 1’ at Dignity Funeral Plans, how can I help you today?”

“Hi, can you put me through to somebody that I can speak to to cancel my plan please?’

“OK, I can certainly help you with that today. Is it possible to take – have you got your plan number to hand at all?”

“Yeah, it’s XXXXXXXXXXXX”

“Thank you. Is it possible to take your name please?”

“Yep, it’s XXXXXXXXXXXX”

“Thank you. OK, so, what I’m going to do, I’m going to pop you through to one of my colleagues who’ll be able to help you today.”

“Yes, that’s fine”.

“OK, so I’ll pop you on hold, I’ll be as quick as possible for you then.”

“Brilliant, thank you.”

45 seconds of music……… 

“Hi, thanks for holding, I’m just going to pass you over to my colleague ‘Person 2’ now who’ll be able to look at this for you, OK?”

“That’s great, thank you.”

“Thank you, take care.”

“Hello, is that Miss XXXX?”

“It is.”

“Hi Miss XXX, my name’s ‘Person 2’, my colleague ‘Person 1’ has advised me that you wish to cancel your Royal London Funeral Benefit Plan, is that correct?

“Yes”.

“OK. Um. He transferred you over to me because I’m the only person available in the erm, the customer service centre. It’s not actually cancellations, so we would need to arrange a call back for you, erm, to actually process the cancellation, would that be ok?”

“No, not particularly, I really want to get this done today please.”

“It will be done today. That call back will be today. We usually have to allow for a two hour turn around so it would be quarter to three.”

“No, I really do need to get this done as soon as possible because I want to get something else sorted out. I’ve already got an appointment with a different pre-payment company this afternoon.”

“Right, ok, bear with me, let me just place you on hold”

“Thank you.”

2 minutes 26 seconds of music

“Hi, Miss XXXX”

“Hello”

“I’m just going to transfer you over to my colleague ‘Person 3’ who is on cancellations.”

“That’s great, thank you”

“She should be able to do that for you ok?”

“That’s brilliant, thank you.”

“Hello, is that Miss XXX?”

“It is, yes.”

“Hello Miss XXX, you’ve been transferred over to ‘Person 3’ in the cancellation team. I believe that you’re wanting to cancel your funeral plan, is that correct?”

“Yes that’s right.”

“OK, can I ask, is there any main reason that you’ve decided to cancel at all, is there anything that we can offer to do for you?

“Well, I spoke to somebody last week, um, to try and find out how much interest the plan’s actually accrued, and just to make sure that my funeral was covered – he was just awful, insisted on speaking over me the whole time, couldn’t actually get a clear answer out of him, and then over the weekend the Competition and Markets Authority report’s come out and that’s just sealed the deal for me so I want to cancel.”

“Right, okay, I mean, I’m happy to answer your questions if you’d like me to go through that with you at all?”

“No, it really is fine, I’ve come to the point where I just want to cancel everything please.”

“That’s absolutely fine, you’re well within your rights to cancel. In order for me to do that over the phone I just need to complete a few additional checks with you.”

“Yep”

“It’s just a couple of questions relating to the original set up of the plan if I may.”

“Mm Hmm.”

“So, could I kindly ask you, when you took out the plan, how it was taken out, so was it done over the phone, was it done via a website do you recall?”

“It was with, well, it was by phone but it was through Royal London.”

“It was.”

“Yeah.”

“And there was some different options of plan type I believe at the time, so there was the Standard Plan, the Classic Plan and the Prestige Plan – do you call what plan type you opted for?”

“Yeah, the Classic Plan.”

“Thank you. And do you recall lastly how you was making payments?”

“Yeah I paid by instalments.”

“Yep, was that direct debit or was that by card? Do you know?”

“Direct debit.”

‘OK, thank you. So that’s all the additional checks that I need to be able to start the process to cancellation, so just to confirm with you what will happen now is I will proceed with the cancellation of the plan, it will be completed within 14 days, any money that you paid into the plan will be refunded, it is subject to a cancellation fee however of £395, everything else you will get back.”

“Right. So, that will leave me with exactly how much?”

“Yup, I can tell that, bear with me.”

“OK, so the refund will be for £2909.53.”

“Right, so in eleven years then, I’ve made £187, you’re going to keep my £187, charge me another £400 to cancel it. Is that basically the gist?”

“Right, so the policies are not – they don’t incur interest, um so..”

“I’m sorry, no, sorry, hang on a minute. So, I’ve taken out a pre-payment plan. And I don’t get interest.”

“No. It’s a product that you’re actually buying. You’re actually securing the services within the plan, that is what you’re guaranteeing, so you took out this plan in 2007, and what you’re doing is, regardless of when that plan comes to be used, you’re guaranteeing the services within the plan so it’s holding the services, the value of the services, so it’s obviously guaranteeing to cover the funeral director’s fees and their staff, it covers the hearse plus one limousine, so everything that’s in your schedule of cover that is what you’re guaranteeing to be covered at the time of need.”

“Oh that’s awesome then, so that means that if I decided to keep this plan then there is not another penny that my family would need to pay if I died tomorrow.”

“There absolutely – once it’s fully paid for you’re guaranteeing to cover your services within the plan.”

“Right, so there’s – hang on, look, I just want to get this straight in my head, ‘cause that’s not what somebody else told me, so you’re telling me that if I keep this plan, if I die tomorrow there is not one penny that my family would have to pay for me to get everything that’s on that plan.”

“No, so  everything that’s on that plan you will – you’re –it’s guaranteed to be covered”

“So Oxford Crematorium is £1070, you’re guaranteeing to pay that are you?”

“Let’s have a look. So yours is a contribution plan towards the crematorium fees, so let’s have a look and see what that is worth, because obviously that’s within the plan, those are called disbursement charges.”

“Yep”.

“So there was £600 when you took this out when you took this out – erm, when you took this out..”

“Was it £600? It was actually £640, but – ok.”

“So that is risen in value because obviously that increases with inflation so that is now worth £827.92. So if you, like you said, were to sadly pass away tomorrow, that money your children would have to put towards the crematoria part.”

“So it’s not completely guaranteed then is it?”

“It’s guaranteed to cover everything that’s listed within the plan, so what – the guarantees, in full are to cover the funeral director fees and their staff, that includes the coffin, the hearse and one limousine, for you to be brought into care of the funeral directors so those are your guarantees within the plan so regardless of when that comes of use , those will be covered by the plan, now you’ve got a  – you’ve a third party towards contributions with the money that – what I’ve just advised you of there so that money rises each year in line with inflation, that money is then put towards the crematoria costs, so the only things that are not – that come outside of the plan are things like – other things like flowers, if your family wanted an obituary notice, order of service isn’t covered, so those sort of things are separate that fall outside of the plan cover, but the things that I’ve mentioned are fully guaranteed, regardless of when it comes to be used whether that’s tomorrow or ten years.”

“So the crematorium and the doctors’ fees are completely covered as of today, so if I died tomorrow, if there’s a shortfall between what you’ve said I’ve got which is what £827.92 and what the crematorium and doctors’ fees are, that’s covered? I don’t have to worry? My family doesn’t have to worry?”

“Yes, so the contribution towards the crematoria fees, so at the moment it is worth eight hundred and whatever – let me just..”

“Yeah, eight hundred and twenty seven ninety two, so that’s covered, but you keep saying that everything’s guaranteed but it’s not, because if Oxford Crematorium is a hundred and – sorry, one thousand and seventy pounds now, my eight hundred and twenty seven pounds isn’t going to cover that is it, so my family – would my family have to cover that or do you?”

“But that rises each year in line with inflation.”

“Yes but if there’s – if I’ve only got eight hundred and twenty seven pounds in there, and Oxford Crematorium is one thousand and seventy pounds – that’s in eleven years I’ve accrued a hundred and eighty seven pounds, so I can’t imagine the costs are going to be even close to sort of being the same are they, as time goes on? So, all I’m asking, all I want is an answer, will my family have to pay the difference between what it actually costs and what I’ve managed to accrue in interest for the disbursements? Will they get a bill? That’s all I need to know.”

“They will, yes.”

“Right, in which case I’d like to cancel the plan please.”

“That’s absolutely fine.”

“Cool.”

“Give me one moment. I’ve gone through the additional checks with you. Now as – we do legally have to refund the same way that payment was taken so I just need to confirm your bank details with you just to make sure that they still match with what we hold, to make sure that we will be refunding the correct account, would you confirm the name of your bank for me?”

“It’s XXXXX”

“Thank you. And could you kindly confirm the sort code and account number for me.”

“Yeah it’s XXXXXXX and the account number is XXXXXXXX”

“Wonderful. So that still matches with what we hold. So the refund will be applied to that bank account within 14 days. On completion of the cancellation Miss XX we’ll also send you confirmation in the post so you will get a letter to confirm everything that I’ve discussed with you and that the plan is fully cancelled down. Is there anything else that I can assist you with at all?”

“No, that’s it, thank you, you’ve been really helpful.”

“Oh you’re most welcome, well thank you very much for your time Miss XXX. I hope you enjoy the rest of your day.”

“Thank you.”

“You’re welcome, bye.”