Pre-Arranged and Pre-Paid Funerals
A Pre-Paid Funeral is where the family and funeral director establish the
funeral pre requisits and services they wish to contract and pay for now at
today's prices, for provision at a future date. The cost of the funeral is fixed,
regardless of future price increases. All States with the exception of Western
Australia and the Territories of ACT and NT have enacted specific prepaid
funeral fund legislation. These State Acts regulate the investment activities
of funeral funds ensuring that pre-paid funeral monies are managed at arm's
length (independently) from the funeral director.
Payment of a pre-paid funeral may be made in one lump sum or through a
payment plan. It is important that families are advised of a pre-paid funeral
contract and details should be provided to members of the family, or filed
with the will and other important documents.
Benefits of a Pre-Paid Funeral Plan
You can protect your loved ones from unnecessary stress related to
making difficult decisions at an emotional time.
Your family will be relieved from any financial burden.
It makes good financial sense. By making all of your choices now, you can fix the price of your funeral at today's costs.
You can ensure that your exact wishes are made known and are carried out.
You may be able to maximise your pension entitlement. Any money spent on a Pre-paid Funeral Plan is not subject to the income and assets test or the deemed earnings roles (according to current legislation).
Pre-Paying provides reassurance for you and your family.
A Pre-Arranged Funeral is where the family and the Funeral Director establish the funeral requirements and services which they may utilise in the future. Information that may be required include: the contact person after your death, important personal information including marriage(s), children, parental details, which will be recorded on a death certificate. Decisions can also be made regarding the location of the funeral service, burial or cremation options, nominated clergy or celebrant to conduct the service, and personal wishes including readings, pallbearers, flowers, donation requests and music. Payment of the funeral is made when the service is conducted.
Some of the details you will need to consider when pre-planning a funeral are:-
the type and style of funeral
whether you would prefer burial or cremation
which ceremony or crematorium
the type and style of coffin or casket
the type of death notices, mourning vehicles and flowers
special features in the service, such as a poem or piece of music
the wishes of your family and friends
how much would you like to spend
Generally there are five cost components of a funeral:
the professional service fees from the Funeral Director which include each of the tasks and services involved in arranging, planning and conducting a funeral
the coffin or casket costs which can vary based on the construction and type, quality, finish and style that has been chosen
cemetery or crematoria charges which are set by individual cemeteries and crematoria and will not vary between funeral companies
options to celebrate a life, which may include: visual presentations, service booklets, thank you cards and memorial books
other third party disbursements payable may include newspaper notices, floral tributes, celebrant or clergy fees, music and catering
The costs associated with a funeral vary due to the numerous choices available, which allow a true reflection of personal, cultural and religious needs.
A Funeral Bond is a special purpose way to set aside money to help cover your eventual funeral costs. Money invested in a bond can only be used for this purpose and is only paid out on death.
Funeral Bonds are a rock-solid investment, backed by a capital guarantee. However, they are also a very flexible and portable investment, which does not tie you to a fixed location. The current maximum amount that can be invested in a funeral bond is $11,000 indexed annually.
Benefits of a Funeral Bond
No entry or exit fees
Social Security and Veteran's Affairs exempts money invested in the bond from the means tests for government benefits
Earnings from the bond do not affect your personal income tax position
Funeral Insurance Policies are designed to meet unexpected funeral costs and are only to be paid upon death. Policies only cover death by accident in the first twelve months.
When you first take out funeral insurance it may cost less than a cup of coffee a week, but some premiums rise and accumulate as you age. It's important that you read the fine print and consider your options before making a commitment.
As an example, if you take out a $6,000 funeral insurance policy when you're 60, by the time you are 75 you may have paid more in premiums than the value of your benefit. And if you live to 90 years of age, you may pay between $64,000 and $84,000 in premiums.
We encourage people to ensure they're making informed decisions on how to pre-finance their funeral by exploring all the options. Do your research and don't take just one person's word for it.