Recently some of our competitors have come into the line of fire regarding their pre paid funeral services. We would like to provide some supportive information to ensure you prepare your funeral in advance - to your expectations, and perhaps offer some questions you might not have considered asking before. Working with families in their time of need, we would like to make this process easier so our service is focused entirely on supporting your family when the time comes.
So firstly, what are your options?
There are 5 options you might consider should you choose a pre paid funeral. It can be a difficult decision to make, and is not a ‘one size fits all’ scenario, so can be daunting.
Pre Paid funeral
A pre paid funeral is a contract between a Funeral Home or Funeral Director and any person who wishes to pre pay for their funeral. You can be any age and in any health range to have a pre paid funeral plan There can be as much or as little preparation made as to the actual details of the service at the time of purchasing the pre paid funeral. You might decide to have a simple service or plan a celebration with certain music or you might like to have a green funeral. It can be paid for in full, or with a deposit and future planned instalments. The agreed cost of your service is held, regardless of the date of your passing, or the potential increased cost of the funeral at that time. So long as you have completed payment for your service prior to your funeral, you are entitled to the agreed value of your funeral at the time of the contract.
In some instances, your pre paid funeral can be transferred interstate, but might be open to a fee or levy as a result of different costs associated with different states funeral services.
The funds paid for a prepaid funeral are not held by the Funeral Home or Director personally, but in a fund that can only be accessed by them in the event of you requiring your funeral. This protects you in the event that your elected funeral director or home closes their business.
The option of a pre paid funeral is the least difficult option for your family and friends, when the time comes to say their farewells. It provides the funeral arrangements and allows you to make any personal requests prior to the service – alleviating the stress of planning your funeral on your grieving family. Allow them to compliment your service in their way by contributing memories to celebrate your life.
Funeral Insurance
Funeral Insurance is offered through several insurance agencies in Australia and may be able to be paid through your superannuation fund. In line with other insurances you may have, it is structured that you pay a premium per fortnight or month to cover the cost of your funeral to an agreed value. The cost of premiums may rise with time and as it is difficult to know in advance when you might require this service, it could be a long time making payments before you use it. Funeral Insurance premiums, like health insurance premiums, tend to rise with the age of the insured party, which can be difficult when managing on a pension down the track.
Not all of insurers will provide you with an instant pay out for the cost of the funeral. It is important to consider the ‘accidental death’ waiting times for insurance. Will your family be able to afford your funeral in the instance that your super isn’t paid out quickly?
Funeral Bond
A funeral bond can be organised through your superannuation fund or financial planner. These funds are stored and invested solely for the purpose of your funeral. You can have an agreed value to deposit over time or deposit the lump sum. These funds cannot be redrawn except in the case of your funeral. If you reach your agreed bond value before you require your funeral, the bond will pay the initial investment and also any increase the investment has made.
High Interest Savings Account
Saving for your funeral yourself puts you in full control of how much money you put aside each instalment – we all know that financial life isn’t regimented as we like it to be, and surprise bills can happen or situations arise that you wouldn’t normally have needed to pay for. Saving for your own funeral in a purpose use high interest savings account can be a great way to know the value of the account and be able to redraw against the money in an emergency. There is a limit to how much you can accumulate in your funeral allocated account, without having to declare the funds.
Ensure you have elected the executor of your will or an eligible family member to access the account so the funeral can be paid for when it is needed. This is a common hurdle for families of the bereaved, as the funds may not be cleared until the will is finalised.
When is the time to commence funeral management plan?
So now you know your options, it’s a great time to consider when is the right time to commence your funeral management plan?
As there are several different options for planning your funeral in advance, it is important to consider your financial situation, your family’s capabilities, the personal investment in your service and how you plan on spending your retirement. Each person will have a different scenario that suits them best, and is entirely individual to their circumstances.
It’s important that you keep the executor of your will up to date on any changes you make to your funeral plan, regardless of the direction you choose. Sometimes this person is separate to your family. It can be helpful to have someone outside the family handle the paperwork so your family will be free to grieve when the time comes. Always review your decisions with a qualified financial adviser to ensure you are making the best decision for your personal situation.
We hope to have shed some light on the options available to you when looking to provide your family with a pre paid funeral option for yourself. If you have any questions or would like to discuss pre paying your funeral with us today, please call the team at Lady Anne on 1300 74 00 74. Together we can provide your family with peace of mind that they can be free to celebrate your life when the time comes, and know that we have planned in advance to alleviate their stress at a difficult time.
