Funeral Plans: Key Things to Know
Understanding Pre-Paid Funerals, Pre-Arranged Funerals, Funeral Bonds and Funeral Insurance
Planning a funeral can be a daunting task, especially for those who haven’t had to organise one before. With so many decisions to make, it’s not uncommon to feel overwhelmed. That’s where funeral directors can help. They offer guidance and support, making sure every detail is handled with professionalism and care.
Funerals offer an opportunity to reflect on and celebrate a person’s life. A funeral director’s role is to work closely with the family to honour the wishes of the deceased, while easing the emotional and practical burden.
What’s the difference between a Pre-Paid and a Pre-Arranged Funeral?
Pre-Paid Funeral:
A Pre-Paid Funeral involves making arrangements with a funeral director in advance, locking in the services you want and paying for them at today’s prices. This type of plan ensures that the cost of the funeral won’t rise in future, regardless of inflation.
In most Australian states, legislation requires pre-paid funeral funds to be managed independently from the funeral company. This gives added reassurance that the funds are safeguarded. From 1 March 2021, Western Australia introduced similar regulations, although these don’t apply to existing contracts.
You can choose to pay upfront in a single payment or through instalments. It’s wise to let your family know about the plan and where to find the paperwork, such as filing a copy with your will.
Benefits of a Pre-Paid Funeral Plan:
- Helps reduce the emotional and financial strain on your family
- Fixes costs at today’s prices, offering potential savings over time
- Allows you to make your wishes clear and ensure they’re respected
- Can improve eligibility for government benefits, as funds held in a pre-paid plan are not counted as assets or income under current rules
- Offers peace of mind for you and your loved ones
Pre-Arranged Funeral:
A Pre-Arranged Funeral is a detailed plan for your funeral service that’s agreed in advance, without making payment until the time of need. You’ll work with a funeral director to outline key decisions such as whether you prefer burial or cremation, the style of the service, who should lead it, and other personal touches.
You may also be asked to provide personal details that will later appear on the death certificate, such as your marital history, children’s names and parents’ details.
Things to consider when planning:
- The type and tone of the service
- Burial or cremation, and location
- Coffin or casket style
- Notices, transport and floral arrangements
- Special touches like music, readings or donations
- Your family’s input and preferences
- The overall budget
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How a Funeral Director can support you
Funeral directors can guide you through each step, helping you understand your choices and the costs involved. Meetings can be held at the funeral home or in your own home, whichever is more comfortable.
Many funeral directors now offer online tools to help you plan or pre-pay for a service at your own pace.
Funeral costs
While prices vary depending on your choices, funeral expenses typically fall into five main categories:
- Professional services: These cover all the tasks involved in arranging and conducting the funeral
- Coffin or casket: Prices vary depending on the materials and design
- Cemetery or crematorium fees: Set by each location and consistent across funeral providers
- Service extras: Options such as printed booklets, visual tributes and memorial books
- Third-party costs: These may include flowers, newspaper notices, celebrant or clergy fees, music and catering
Costs will vary based on your preferences, cultural or religious requirements, and the type of farewell you wish to create.
What is a Funeral Bond?
A Funeral Bond is a secure way to set aside money for your funeral. The funds are only released after your death and must be used for funeral costs. Bonds offer flexibility and can be transferred if you move, but they remain dedicated to one purpose.
The Federal Government sets an annual limit on how much can be invested in a funeral bond. These investments often come with a capital guarantee and don’t incur entry or exit fees.
Benefits of Funeral Bonds:
- Exempt from the assets test for government entitlements
- Returns don’t affect your taxable income
- Funds are held securely until needed
What about Funeral Insurance?
Funeral Insurance provides a lump sum payout when you pass away, to help cover funeral costs. Most policies only pay for accidental death in the first 12 months. Premiums are usually low to start with but can increase as you get older.
Before committing, it’s important to read the fine print and weigh up whether insurance is the right option for your circumstances. Make sure you’re fully informed and don’t rely on a single source when making decisions about how to fund your funeral.
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Choosing a Funeral Director who is a Member of Funerals Australia
For added peace of mind, it’s recommended to use a funeral director like Bowra & O’Dea who is a member of Funerals Australia. All members follow a strict Code of Ethics and Practice to ensure professional and respectful service.
To learn more or find a Funerals Australia member near you, visit www.funeralsaustralia.org.au or call 03 9859 9966
