Funeral insurance

The average UK funeral now costs £5,212, with the average basic service costing £3,083, according to the 2025 British Senior Funeral Report. For many families, that bill arrives at the worst possible time, in the middle of grief, with little time to prepare. It’s one of the reasons people look into life insurance as a way of making sure their family isn’t left to cover that cost alone.

If you’ve been searching for “funeral insurance”, you’re in the right place. Post Office doesn’t offer a standalone funeral insurance product, but our over 50s life insurance is commonly used to cover funeral costs. It offers a guaranteed cash payout when you die, which your family can use to cover your funeral or anything else they need. 

What is funeral insurance?

Funeral insurance is a life insurance policy that pays out a cash lump sum when you die. Your family can use that money to pay for your funeral, cover outstanding bills, or spend it however they need to. There are no restrictions on how the payout is used. 

While Post Office Over 50s Life Insurance isn’t specifically for a funeral, our customers often tell us it’s the primary reason they opt for this type of policy. Unlike some other types of life insurance, over 50s life insurance doesn’t only cover you for a fixed period. It covers you for the rest of your life, regardless of how long you live. 

Another key aspect of our over 50s life insurance is that it has guaranteed acceptance for UK residents between 50 – 80, with no medical questions asked. If you die and your policy is in force, your family receives the payout.

Is funeral insurance the same as a prepaid funeral plan?

No, funeral insurance is not the same as a prepaid funeral plan. This is the most common point of confusion, and it’s worth clearing up early.

Here’s a straightforward comparison. 

If you want flexibility over how the money is used and prefer not to pre-arrange your own funeral, funeral insurance may be the better fit. If you want to lock in today’s prices and take the planning burden off your family entirely, a prepaid plan does that job. Some people choose both: a funeral plan for the arrangements and funeral insurance to cover the extras or leave something additional for their family.

How Post Office Over 50s Life Insurance works

With Post Office Over 50s Life Insurance you choose a fixed monthly premium, and that determines the cash sum your family will receive when you die. Your cover then lasts for the rest of your life.

Here’s how it works, step by step:

Choose your cover amount

The amount of cover available depends on your age when you apply. The maximum cover available is:

Your monthly premiums will be impacted by how much cover you choose, so you can select a figure which fits your budget.

Pay a fixed monthly premium

Your monthly premium is fixed from the day you take out your policy and won't increase, unless you choose to take out the increasing benefit option. Whatever you pay when you start, you’ll still be paying the same amount years later. Premiums start from £5 per month¹ depending on your age and the cover amount you choose.

Premiums stop at 95

If you reach the age of 95, your premiums stop altogether. Your cover, however, continues for the rest of your life. This means that if you live beyond 95, your family will still receive the full payout when you die, but you can put that monthly cost towards something else.

Your family receives the payout

When you die, your loved one makes a claim and receives the cash sum. There are no restrictions on how they use it. They might put it towards the funeral, use it to cover outstanding household bills, or simply keep it as a gift from you. That flexibility is one of the things that makes funeral insurance different from a prepaid funeral plan. 

Unlike inheritance which can take a long time to process, over 50s life insurance payouts are usually significantly faster, often being processed within a matter of days.

Important to note: The first 12 months

In the first 12 months of your policy, the full payout is available if you die as a result of an accident. If you die from natural causes (such as medical conditions) during this period, your family will receive 1.5 times the premiums you have paid rather than the full cover amount. After 12 months, the full payout applies for any cause of death.

Post Office's Funeral Benefit Option with Co-op, available free with all policies

Post Office insurance has partnered with Co-op Funeralcare to provide a free funeral benefit option with all over 50s life insurance policies. If your family arranges your funeral with Co-op, you can get up to £250 off a Tailored funeral, £100 off an Essential funeral, or £50 off a Direct to Cremation service. That’s in addition to your payout, at no extra cost whatsoever.

It’s a practical benefit that bridges the gap between funeral insurance and a prepaid plan, giving your family both financial flexibility and a ready-made relationship with a funeral provider. 

What else is included with Post Office Over 50s Life Insurance?

Post Office Over 50s Life Insurance includes a number of additional benefits that are worth knowing about.

Free health and wellbeing services for you and your family

As a policyholder, you get access to a range of health and wellbeing services at no extra cost. These include 24/7 GP access, compassionate support and other health and wellbeing services. Importantly, these services extend to your partner and your children up to the age of 21. These are benefits you can use while you’re alive, not just something your family benefits from when you die.

Please note, this service is separate from the policy contract and is therefore not guaranteed to be offered throughout the entirety of your policy. If we withdraw it in the future, we’ll be sure to let you know.

Immediate accidental death cover

From the day your policy starts, if you die as a result of an accident, your family will receive twice the standard cover amount. This applies from day one, with no waiting period.

Welcome reward

When you take out a policy, you can choose a welcome reward: either a £125 gift card (redeemable at M&S, Amazon or Dining Out) or a leisure experience worth up to £200. This offer is available as of 2026, ending in April 2027. Qualifying period, minimum premiums and terms and conditions apply.

Protected benefit

If you need to stop paying your premiums later in life, your family can still potentially receive a payout when you pass away.

When you take out a policy, we count the number of premiums that you’ll pay between that point and your 95th birthday. As long as you pay the first half of them, we guarantee you half of your cover. That way, if your circumstances change and you need to halt your monthly payments, you won't leave your family empty handed.

Award-winning provider

Post Office won Best Over 50s Life Insurance Provider at the 2026 YourMoney awards. In the last 15 consecutive annual YourMoney.com Awards, Post Office were shortlisted for our protection product features and price, before being judged by a panel of readers on the quality of service provided. This excludes 2020, when there was no award.

Things you need to know 

Depending on how long you live, you could pay more in monthly payments than the cash sum we pay out when you die. The cash sum you choose is fixed and inflation (the rising cost of goods and services) will reduce its value over time.