When it comes to arranging and paying for a funeral you have a few options.
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One of those is to put some money aside, or just leave your family to deal with it.
When you think about the grief a family goes through, arranging a funeral can be one of those experiences that just makes a person’s passing even harder to deal with.
Funeral insurance isn’t much better, and can actually be worse. If you miss any payments for whatever reason, cover may be denied, which can make it even more harrowing for those you leave behind.
A study commissioned by Invocare in 2010 found that funeral insurance can be more expensive than the alternatives after as little as six years of payments.
The best option, they found, was that of the pre-paid fixed-price funeral.
The arrangements are also pre-made, and in the way the person wants to be remembered.
They can usually be paid off in installments, and once they’re paid, they’re paid, unless of course someone decides to add something that wasn’t included to begin with or the council decides to add another fee.
Unlike insurance there are no policy conditions to comply with.
For instance, there are no health checks or even health statements to be filled in.
A prepaid funeral is also currently exempt from Centrelink’s assets test, unlike a funeral bond.
This may matter to you if paying for your funeral now helps to get you under the threshold to qualify for a pension or part-pension.
On top of all that, you’re paying at today’s price. If it’s paid for later it will cost more purely due to the almost inevitable likelihood of inflation.
As with any significant purchase it’s always necessary to ensure that you understand what is and isn’t included in the contract.
One thing to watch out for is you may not be able to change the location after the purchase, especially if you prepay with a very small organisation.
ASIC’s website says “You should ask for a full description of the costs to see exactly what you are paying for. Funeral service operators who don't reveal the costs of a funeral are in breach of the Competition and Consumer Act 2010.”
