Frequently Asked Questions
What are the advantages of a Whole of Life Plan?
Money from pre-payment funeral plans can be held in one of two types of investment vehicle: Trust Funds or Whole of Life Assurance policies.
Although Trust Funds are governed by Trust Law and have Independent Trustees, they are not necessarily as secure as insurance company life funds for investing funeral plan-holders’ premiums. The latter are subject to strict rules and regulations in terms of governance and financial reporting. There is also a requirement to hold additional solvency margins over and above the policyholder reserves. Trust Funds have no such requirements.
Trust Funds also suffer from being relatively small and therefore more open to the risks associated with poor investment performance. Perfect Choice funds are held securely in a whole of life assurance policy which includes a guaranteed return in line with movements in the 'All Items' UK measure of the Retail Prices Index (RPI) over and above a full guarantee of the sum assured. Investing in a Trust Fund gives no such investment or capital guarantees.
Do I need to guarantee disbursements?
The standard Perfect Choice Funeral Plan no longer fully indemnifies plan-holders against the cost of disbursements (payments to third parties outside of the control of funeral directors). Instead it guarantees that the amount set aside to cover disbursements will increase in line with the RPI.
What if I still wish to guarantee disbursements?
The Perfect Choice Funeral Plan guarantees to cover the cost of increases in disbursements in line with RPI. If you wish to make a further guarantee to your customers to cover all increases in the cost of disbursements, you may do so. This will not alter the amount you receive on claiming from NAFD Services Limited; you will need to cover any shortfall, as NAFD Services accepts no liability for this. The Perfect Choice Team will be pleased to provide suitable text for your Perfect Choice brochures if you wish to guarantee third-party costs for your customers.