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When you are still getting on with life, your own mortality is not something you really want to think about, so why worry about your funeral expenses now? While there may be no sense urgency, you may be surprised how much funeral arrangements can cost these days - from anywhere between $4,000 up to $15,000 (Money Smart, 2013). The average costs of funerals in Australia often vary significantly because of the difference between one family’s needs and requirements to the other.
There are a number of different components to consider when arranging a funeral, which will vary the cost depending on the service providers and each can have a great impact on the final bill. The cost of organising a wake is another expense that is often forgotten. Some of the typical costs of a funeral arrangement often include:
There are three main kinds of funeral plans available on the Australian market, each with components suitable for different individuals. To determine which funeral plan is most suitable to your needs and budget, it's important to review the terms and conditions of each of these plans. Understand the cost implications overtime and any restrictions that may affect your funeral benefits.
Funeral insurance is designed to provide a lump sum payment of fixed amount of cover, in return of ongoing premium payments, either on a fortnightly or monthly basis. Generally, you can choose a cover amount between $5,000 up to $30,000 with increments of $1,000, which will be paid to your nominated beneficiaries if you are to pass away. Funeral insurance policies can vary significantly between providers, so it is important to read the Product Disclosure Statement (PDS) closely before you sign up. Remember that with funeral insurance, you are not saving for funeral costs. Rather, you are buying insurance so that these costs can be met in the future if anything happens to you.
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What should I look out for with funeral insurance plans? | |
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With a pre-paid funeral plan, you can organise a payment plan or pay for your funeral in advance. The cost for the funeral arrangement is locked in at today’s rates and won’t change regardless of any future changes. The benefit is paid to your family either as a lump sum or in instalments. When paid in instalments, an initial payment may be required upfront. Be aware that the cost of a funeral director’s services and packages often vary from one to the other. So, make sure that you have detailed descriptions of the costs to know what you are paying for.
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What should I look out for on prepaid funeral plans? | |
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Funeral bond plans are investment products designed to put aside funds to cover your funeral costs. The money set aside in a bond can only be used for this purpose and to be withdrawn after you have died. Funeral bonds are flexible and portable investments, so you won’t be tied to any fixed locations. You can opt to invest in a funeral bond directly through an investment company (friendly societies or life insurers), or from a funeral director, and it can be assigned to your chosen funeral director. You can invest up to a maximum of $11,000 in your funeral bond and it is indexed on an annual basis.
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What should I look out for with funeral bonds? | |
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Choosing between different funeral plans and options available to fund your funeral arrangement may not be such an easy feat. Your best bet is to compare different plans to determine which ones will suit your personal needs the best. When in doubt, consider speaking to an insurance adviser or financial planner who can help you in your decision.
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What funds are there that I can take out a prepaid funeral and pay off in monthly instalments – I am 68 y.o.
Hi Bev,
Thanks for your inquiry.
If you are after a prepaid funeral you will need to speak to a funeral director or a funeral planner.
Alternatively, if you’d prefer to get a quote for funeral insurance and compare your options, you can enter your details into the form found this page. Basically, the premiums for funeral cover is paid monthly just like the case of any other forms of cover. Although the total monthly premium will vary depending on how much cover you will get.
Cheers,
May