Death – now guaranteed

12 February 2010 at 9:29 am 2 comments

Claudia Rimington writes:

I’ve been doing some work on funeral planning products, and a number of providers, notably Age Concern, are advertising the guaranteed nature of their funeral plans – payment plans where you pay for a funeral in advance.

It is guaranteed because you can guarantee that it buys a ‘set’ funeral in the future – unlike a savings plan, which might not keep up with rising funeral costs, leaving relatives or friends to cover the difference.

So why is this interesting?  The focus on ‘guarantee’, combined with the remarkable recent success of funeral plans, points to a prevalent consumer trend.  The Telegraph suggested recently that the guarantee was the reason for the success of these products.  Our own research in Planning for Consumer Change suggests the same.  With consumers living in a world of greater uncertainty, we know that they look for where they can exert grater control.  Guarantees provide this – indeed as they did in the 19th century when funeral plans were common (to insure against being buried in a common grave).

I also like the straightforward way Age Concern sells its offer. The funeral plan is simple and transparent – you pay for a certain number of things at a set price and they guarantee you get this. Other companies offering guarantees don’t always do this.   Prudential, with its Guaranteed PruFund investment fund, explains that its guarantee results from their special ‘smoothing formula’, which is almost impossible to understand from reading their website, and which undermines the desire for control which makes the offer attractive in the first place. And of course, the whole point of a ‘guarantee’ is that you know what you’re going to get.

Entry filed under: ageing, financial services. Tags: , , .

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2 Comments Add your own

  • 1. Adeline Hampton  |  12 February 2010 at 12:24 pm

    Surprised to see you only mention Age Concern – don’t Dignity and The Co-op also guarantee their plans?

    Reply
  • 2. Claudia Rimington  |  19 February 2010 at 7:05 pm

    Thank you for reading!

    Yes – that is indeed the case. The Dignity and Co-op products offer the same form of guarantee (paying for everything in advance). I only mentioned Age Concern because it is only them who seem to shout about ‘guarantees’ so much in their communications.

    A side point which has just occurred to me: What is perhaps interesting is looking at the entire funeral plan landscape – there are different types of plans and they offer different types of guarantees. An alternative to the ‘payment plan’ (which is what Age Concern, Dignity and the Co-op have) is funeral insurance, where you pay premiums every month. This could be seen as ‘more guaranteed’ in a way, because if you die after 2 years, you guarantee to cover your funeral, whereas with a payment plan if you die mid payment, I don’t think you do. I wonder whether consumers differentiate between levels of guarantee at the moment? My guess is that they do.

    Reply

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The Futures Company was created through the merger of Henley Centre HeadlightVision and Yankelovich in 2008. This is the blog of the new company - but the former posts from the former Henley Centre Headlightvision blog still can be found here.


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