Let’s discuss death and how we pay for it. Yes, it’s not a topic that sits well with anyone. But the hard reality is that it’s the only sure thing in life and it is inevitable.
However, what’s not inevitable is the burden placed on the family for the costs of your funeral.
It can be too overwhelming for your family to decide how to pay for a funeral and the best options to take once death has occurred.
There are many options available for both pre-planned funeral arrangements and funeral insurance, so having all the information for both options is the best way for you to make an informed and educated decision.
Funeral Insurance – The pros and cons
Like other insurance types, you pay a regular premium in exchange for a fixed amount of insurance coverage to be paid out after your death.
When taking out a funeral plan or funeral insurance, be careful to read the fine print and understand the contract thoroughly before signing it.
- It is a quick process where the application process is straight forward, and the acceptance is guaranteed if you meet the criteria.
- There’s no need for a down payment to commence cover.
- There is usually the option to have different budgeting structures in either fixed or age-based policies.
- The funds can be used for any forms of expenses necessary at the time, either for the funeral or finalising other debts of the deceased like credit card debt.
Some insurance companies advertise plans as affordable, but in reality, this depends on your age and health.
The premiums might end up increasing over the years, and you could end up paying more than what the funeral would cost.
- If you stop paying your premium for some time or miss a payment, your policy could be cancelled.
- Premiums can increase over time as you age unless you choose a fixed premium policy, and you may end up paying more than the funeral costs.
- You may not be covered if your death happens while travelling overseas and outside Australia, especially if it’s a country with travel restrictions placed on it.
- Payments will most certainly continue to increase as premiums increase and you’re likely to have more expenses but a decrease in income after retirement age.
- Sometimes it can take a long while for insurance companies to finally pay out the full amount to your family and in most cases the funeral home will need to be paid up front.
- If you decide to cancel at any time you won’t get your money back.
Prepaid funerals – The pros and cons
A prepaid funeral is when you purchase your funeral plan in advance with a funeral home of your choice.
You have the flexibility and control of discussing the type of funeral you’d like with a Funeral Director and then paying for it with a payment plan under today’s prices.
- You have complete control over your funeral details with every detail from deciding on a burial or cremation, what type of casket to what kind of flowers and music.
- The costs are fixed in today’s currency and are fixed so even if the funeral homes fees go up over the years, you’re paying at today’s prices.
- Ask your funeral director to explain where the funeral payments are securely invested and with what independent entity. This means that even if your funeral home goes out of business or you move interstate, the funds can be transferred to another funeral home.
- If your death occurs interstate or overseas and your funeral needs to take place interstate or overseas, the funds you’ve paid will go to your estate.
- In Queensland there is a Government regulated 30 day cooling off period so you can get all your money back if you change your mind within the 30 days. (Less a $50 fee)
- Prepaying your funeral means a lot of details need to be determined. You may not want the burden of organising everything yourself and would instead rather leave this to your family.
- There will be a legally binding contract on the final details, so once signed off, the plans are final.
- Prepaid funerals will require a deposit. If you don’t pay the whole amount as a lump sum upfront, you’ll most likely still have a deposit to pay before you start making installments.
Burials and cremations can be costly if you have not prepared in advance, so it is always a good idea to have arrangements in place.
At Newhaven Funerals, we are on your side and have created a dedicated funeral plan that is backed by State Government Legislation and designed to protect you.
You can be sure that any contributions you make into your funeral plan will be safe and ready to help your family in their hour of need.
Having a funeral plan in place will ensure that your wishes are carried out and your investment won’t be cancelled if you miss a payment.
Your family will not need to discuss whether burials or cremations are better because you will have made your decision clear to them and your plan will have everything taken care of.
You can also download a copy of this article for future reference by clicking the following link: Benefits of Pre-Planned Funeral Arrangements vs Funeral Insurance
Article by Tim Connolly – Funeral Director Newhaven Funerals Brisbane & Gold Coast
Tim Connolly – Funeral Director
Newhaven Funerals Brisbane & Gold Coast.
Growing up around funerals since the age of six allows Tim a unique understanding of how a family owned funeral business should be. Since leaving school in 1992 Tim has been deeply involved in all aspects of operating their family owned business, including operating crematoriums, memorial gardens and pet cremation business. Tim is more than competent to assist all clients with any request