Are funeral plan allocations beneficial to the independent funeral sector?

The debate as to whether funeral plan allocations are beneficial or detrimental to the independent funeral sector has raged for over a decade now.

As a fragmented industry fuelled by many differing types of business operating within it, all with their own localised issues, varying levels of competition and diverse commercial opinions, means this debate is not likely to result in a universally agreed upon answer.

Related Articles

A good place to start, however, is understanding how the ‘plan allocation’ product came to market, how it has continued to evolve and what solution it provides to stakeholders nationwide:


Funeral Plans were initially sold to the general public by funeral directors for two primary reasons:

  • To ensure that they secured future funerals in the region over their competition and as such, protected their future existence as a business.
  • To ensure that they were paid for the funeral service in question.

Where funeral directors boast a unique skill, is looking after bereaved people and conducting funerals. Funeral planning companies were [and are] able to speak to the wider population – the ‘not yet’ bereaved – creating new channels of distribution that educates consumers on the benefits of a prepaid plan, whilst driving custom to funeral directors – albeit business that would take place in the future.


As the prepaid market continues to grow, so does public interest, engagement and sales, creating a more commercialised industry.

Continued education around the importance of pre-planning and preparation, means consumer behaviour has continued to change, consumers have become more knowledgeable and therefore ‘selective’ in funeral service-based decisions.

This has modified the funeral product into more of a considered future planning purchase, rather than one of distress that has always been purchased at need, at the time of death in the funeral home.

In addition to this, the population at large has also been under the impression that the funeral industry has been charging unjustifiably high fees for funerals for decades and the non-loyal 50+ consumer of today is educated enough, with access to the internet to shop around for the best combination of both convenience and perceived value.

This has and will continue to heavily affect the funeral industry, where the days when a local resident was considered a future client or even that they would still be living in the area in ten- or twenty-years’ time, can certainly no longer be counted on as expected.

In addition, research commissioned by Golden Leaves in 2018, one of the largest independent surveys on consumer attitudes conducted in the pre-need sector, revealed that most consumers who purchased a funeral plan via a funeral home were aged mid 70’s.

Whereas, the overwhelming majority of consumers that purchased funeral plan products from planning companies and their networks outside of funeral homes were approximately 12 years younger in their early 60’s.

Interviewing over a thousand members of the public, the research also indicated that individuals under 70 would rather buy outside the funeral home, and that almost half of those over 70 were in line with this finding, as they felt anxious about the prospect of entering those types of establishments.

On average people purchase from funeral planning companies up to 12 years earlier, you have a market that whilst not buying from the funeral business is being marketed to regularly and efficiently for over a decade prior to it potentially buying a product from a funeral director.

Understanding this change in consumer behaviour towards the funeral industry is incredibly important, because it demonstrates the fundamental reason of accepting reputable pre-need funeral allocations for the independent funeral businesses.


Though understanding changes in consumer behaviour are incredibly important, it is also vital to understand exactly how funeral plan allocations offer a wealth of benefits to funeral directors:

Guaranteed income: Though it is certainly true that allocated pre-need funerals deliver significantly less income than the service provided for self-sold pre-need or walk ins, the value of funeral plan allocations should not be underestimated. Valuable income is delivered on allocated pre-need, where the funeral business is guaranteed to be paid – completely eradicating the risk of bad debt from these transactions.

Increased Brand Visibility: The best advertisement for funeral businesses is to be seen conducting funerals in the community. The more often the business is seen performing funeral services, the more noticeable its brand becomes. Referrals, walk in at-need and local reputation can be intrinsically linked to the volume of funerals conducted in the community. Working directly with funeral planning companies is likely to increase this volume and visibility.

More efficient use of staff: An increase in funeral services to conduct and perform, means any down time of staff can be minimalized and maximum utilisation of resources and those associated cost efficiencies can be enjoyed.

Increase the profitability of your own at-need: Delivering pre-need funerals at a lower trade rate, on top of your usual quantity of at-need or maturing self-sold pre-need can maximize your profit levels by helping to absorb your fixed cost base.

Secure future funerals and protect your business: With competition fierce in both the funeral sector and pre-need space, accepting allocated pre-need is a simple and cost-free way of acquiring future clients and business. The planning company and its network of marketing agents are doing all the hard work of securing clients, so that you do not have to do so much work in this fiercely competitive and very expensive area, in direct competition with companies which are extremely active in this area and have larger marketing budgets.

In essence, these points can be summarised in one clear sentence: Future allocated plans from reputable FPA registered funeral planning companies, results in future secure guaranteed business and guaranteed payment for funeral directors.


So, are allocated funeral plans beneficial or detrimental to the Independent funeral sector?

Consumers will still continue to purchase funeral plans outside of the funeral home, which is an undeniable fact. Therefore, we believe that the real decision here is not whether to accept allocated pre-need, but rather who to accept allocated pre-need from. It is also our belief that this decision should be based on the reputation and quality of the funeral planning company in question, as well as the strength of its trust fund.

Allocated pre-need support from reputable and quality funeral planning companies form an integral part of an independent funeral homes current and future strategic defences against the loss of future funerals, market share and of course – the loss of future income and growth opportunities.

Therefore, working together as a united force will not only drive and protect future growth, but will also adhere to evolving consumer demands.

Back to top button