Family Finance

Taking the stress out of funerals


Arranging a funeral is never easy due to the emotional and financial cost but there are various arrangements that we can prepay as well as fix the arrangements and cost ahead of time.

Prepaid funeral: This option involves prepaying a part or total of the funeral cost, fixed at today's prices. Options include a progressive payment plan, or a pre-purchased funeral package including a cemetery plot, or plaque on a memorial wall or the memorial garden. Make sure you check the inclusions and exclusions in the fine print.

Funeral insurance: Insurance should be considered as a method of 'prepaying', by paying the monthly or annual policy until you reach age 90, after which the cover continues for free. Pick from fixed or variable premiums, the latter likely to increase annually and will vary by specific health and lifestyle conditions.

Some exceptions may apply in the early years of a policy, and the later you purchase a policy, the more costly cover will be. Premiums are unlikely to be refunded if you stop paying for the policy.

Superannuation: Most super funds include a death benefit. Make sure you are aware of what it covers, and you have provided your preferred 'nominated beneficiary'. Rules vary by state, so contact the Australian Taxation Office or investigate super death benefit policies.

Funeral bonds: Bonds are typically offered by life insurance providers, paid for in a lump sum or instalments. The company holds your money in investments, but as this may not cover additional items like flowers and a burial plot, it may be wiser to have your own separate savings account for this.

The sooner your funeral preferences are known, the better the financial outcome and experience your family will have during their grief. Make sure you read the fine print of any financial contract you enter into as there can be hidden and unexpected difficulties, which can be avoided with due care.

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