What is a Funeral Benefit Option?

Last updated 9^th April 2025
3 minute read

A Funeral Benefit Option is a free add-on available with many plans. It gives your family an extra sum of money towards your funeral costs, as long as they use the funeral provider named in your policy.

So, is it worth opting in to a Funeral Benefit Option? If you have specific plans for how you’d like your payout to be spent, it might not be needed. But, with the average attended funeral costing over £4,000, this extra sum could be a big help at a difficult time.  

Here are some of the benefits and things to think about before adding a Funeral Benefit Option to your life insurance plan...

How does a Funeral Benefit Option work?

If you take out an over 50s life insurance plan, you may be offered a Funeral Benefit Option for free. If you choose to add it to your plan, it means:

• When you die, your payout will automatically go to a funeral provider named in your policy.
• The funeral provider will give an extra sum of money towards your funeral costs, at no extra charge. This is usually around £200 to £300.
• One of their funeral directors will help your loved ones in planning your send-off. 

If your payout and Funeral Benefit Option total doesn’t cover the whole cost of your funeral, your loved ones will need to pay the difference.

It’s also worth noting that with some over 50s plans, the Funeral Benefit Option is only valid after you’ve had your policy for a certain amount of time, such as one year.

Is a Funeral Benefit Option right for me?

Not sure if you’d like to add a Funeral Benefit Option to your over 50s plan? It may help to look at which company is named as the funeral provider. Then you can see if they have a branch near you.

For example, SunLife's Funeral Benefit Option is in partnership with Dignity, so your payout would go directly to your local Dignity funeral director.

Even if your local director has an independent name, they may in fact be part of a larger chain like Dignity(www.dignityfunerals.co.uk opens in a new tab). So it’s always worth checking this before you choose whether or not to add a Funeral Benefit Option to your plan.

Can I change my mind about a Funeral Benefit Option?

There’s no commitment with a Funeral Benefit Option, as nothing is arranged in advance. Most over 50s life cover providers let you add or remove this benefit to your cover at any time.

And if your loved ones change their mind when the time comes, they don’t have to use the named funeral provider.

This won’t affect their payout from your over 50s life insurance. It just means they won’t get the extra sum of money that the Funeral Benefit Option provides. However, there are lots other ways you can get extra help with funeral costs.

Can I have more than one Funeral Benefit Option?

You can only have one Funeral Benefit Option. If you have multiple over 50s life insurance plans, you can only add this benefit to one of them.

How much does a Funeral Benefit Option cost?

A Funeral Benefit Option shouldn’t cost you or your loved ones anything extra. It’s a free add-on to your over 50s life cover.

When might a Funeral Benefit Option not be the right choice? 

People take out over 50s life insurance for all sorts of reasons – not just to help pay for their funeral. For example, some want to leave their loved ones a nest egg for a rainy day, or help pay off bills or debts. If this is the case, then a Funeral Benefit Option may not be needed.

Here are some other reasons why a Funeral Benefit Option may not be for you:

• You already have a Funeral Benefit Option on an over 50s plan
• You have a pre-paid funeral plan in place
• You want a direct cremation

It’s also important to read the terms and conditions for a Funeral Benefit Option before you add one to your plan.

Want to know more about funeral costs?

Here are some helpful guides on paying for a funeral:

• A guide to paying for your funeral
• What happens if you can’t afford a funeral?
• Get help with funeral costs