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  • Writer's pictureJames Fulton (Director)

Prepaid Funeral Plans FAQ's

Updated: Nov 1, 2023

Family and prepaid funerals

Prepaid Funeral Plans FAQ's

We here at Australian Funerals and Cremations are often asked the difference between prepaid funeral plans and funeral insurance. We have put a frequently asked questions together.

Planning a funeral can be a daunting task, especially during an already difficult time. That's why many people choose to prepay for their funeral, to alleviate some of the stress and financial burden on their loved ones. Here are some of the most common questions about prepaid funerals.

Planning ahead through prepaid funerals offers a thoughtful approach to ensure your final wishes are honoured while alleviating the financial burden on your loved ones. Our commitment to transparency and support drives us to provide clarity on the intricacies of prepaid funeral arrangements.

Throughout this informative journey, we will navigate the key aspects of prepaid funerals, empowering you to make informed decisions that reflect your unique life and values. Join us as we explore the comfort and security prepaid funerals can bring to you and your family.

What is a prepaid funeral plan?

A prepaid funeral is an arrangement made in advance, where individuals can plan, arrange and pre-pay for their funeral services before their passing. Prepaid funerals are organised through a funeral director and allow you to select and pay for specific funeral arrangements, such as the type of service (funeral or cremation), casket or urn, venue, flowers, and other details.

With a prepaid funeral, individuals can ensure that their final wishes are carried out exactly as they desire, providing peace of mind to both themselves and their loved ones. The funds for the prepaid funeral are typically placed in a trust or a funeral bond, safeguarding the money until it is required for the funeral expenses.

Prepaid funerals are not to be mistaken as funeral insurance. In short, the most significant difference between the two is; money put towards your prepaid funeral remains yours, whereas funeral insurance is a where you are paying a premium and even if some companies offer "pay no more after 85" you will pay more than your funeral and premiums ramp upwards as you get older.

Why should I consider a prepaid funeral plan?

Considering a prepaid funeral plan offers several significant benefits and peace of mind for both you and your loved ones. By preplanning your funeral, you take control of your final arrangements, ensuring that your wishes are honoured and easing the burden on your family during a challenging time. Most of the key reasons are listed above in the "What are the differences between prepaid funerals and funeral insurance?" Section.

What are the differences between prepaid funeral plans and funeral insurance?

Prepaid funerals offer several significant advantages over funeral insurance, making them a more practical and considerate choice for individuals and their families.

1. Price Certainty: Prepaid funerals allow individuals to lock in the cost of funeral services at today's prices. This means they are protected against future price increases, ensuring their loved ones won't face additional financial burdens due to inflation.

2. Customisation: With prepaid funerals, individuals can personalise every aspect of their farewell, tailoring it to reflect their unique life and values. Funeral insurance, on the other hand, may not cover the full extent of personalisation options.

3. Financial Security: Prepaid funerals provide a secure and transparent financial arrangement. The funds are either placed in a trust or a funeral bond, ensuring that the money is protected and used solely for its intended purpose.

4. No Ongoing Premiums: Unlike funeral insurance, prepaid funerals do not require ongoing premiums or payments. Once the prepaid amount is settled, there are no additional financial commitments, providing a hassle-free arrangement.

5. Emotional Relief: By planning and paying for their funeral in advance, individuals offer their family peace of mind during a difficult time. Loved ones won't have to navigate funeral expenses and decisions amidst grief, allowing them to focus on honouring their loved one's memory.

6. Avoiding Waiting Periods: Some funeral insurance policies may have waiting periods before full coverage is provided. Prepaid funerals, on the other hand, offer immediate coverage without any waiting periods.

7. Flexibility in Payment Options: Prepaid funerals allow individuals to choose from various payment options, including lump-sum payments, instalments, or regular contributions. This flexibility ensures that prepaid funerals are accessible to individuals with different financial situations.

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In summary; prepaid funerals provide an all-encompassing solution that offers price certainty, personalisation, and financial security, all without the burden of ongoing premiums. By choosing prepaid funerals, individuals can leave behind a thoughtful and caring legacy, ensuring their final wishes are honoured while offering their family much-needed emotional and financial relief.

How secure are prepaid funerals?

Prepaid funerals are considered secure due to regulatory measures and consumer protection laws. The Australian Securities and Investments Commission (ASIC) oversees the financial arrangements for prepaid funerals to ensure funds are safeguarded. Funeral providers are required to place the prepaid funds in a trust or a funeral bond, protecting them from misuse or mismanagement.

By law, funeral directors must adhere to strict guidelines, and any changes in prepaid funeral contracts must be approved by the customer or their representative. This provides an added layer of security for individuals and their families, assuring that their investment will be used for its intended purpose when the time comes. Make sure if you're signing up for a prepaid that the funeral director provides you with all information about the trust, including a receipt. Unfortunately, there are some directors who do not provide evidence and misappropriate money.

Is a prepaid funeral considered an asset with Centrelink?

Prepaid funerals are generally not considered as assets for the purposes of asset tests for the Age Pension means test by Centrelink in Australia. However, there are specific guidelines and limits that govern the treatment of prepaid funeral funds.

According to the current rules, prepaid funeral funds are exempt from the means test if they meet certain conditions, including:

1. The prepaid funeral contract must be with a licensed funeral fund/trust.

2. The funds must be specifically designated for funeral expenses.

3. The prepaid amount should not exceed the allowable limit set by Centrelink

Are prepaid funeral plans regulated?

Prepaid funeral plans in Australia are subject to comprehensive regulations that prioritise consumer protection and financial security. Each state and territory's Fair Trading or Consumer Affairs authority oversees the regulation of prepaid funeral plans.

family is what counts
family is what counts

Can I prepay for a funeral at today's prices?

Absolutely! Prepaying for a funeral allows you to lock in today's prices for the services and arrangements you choose. By doing so, you protect yourself and your loved ones from potential future price increases due to inflation or market changes. We here at Australian Funerals and Cremations strongly recommend this as a way to avoid inflation costs of a funeral

Can I prepay for a cremation?

Absolutely. Prepaid funeral plans can cover any type of funeral service, including cremations. Whether you prefer a traditional burial or cremation, you can plan and prepay for it in advance.

How much does a prepaid funeral cost?

The cost of a prepaid funeral can vary depending on several factors, including the type of funeral service, the location, the funeral director, and any additional personalised arrangements. Australian Funerals and Cremations' prepaid funeral plans are designed to be flexible and cater to individual needs and budgets.

As a rough estimate, prepaid funeral plans may start at around $2,500 to $3,500 for a basic package, which typically includes a simple cremation or burial service. However, more

Prepaid funeral decisions

comprehensive plans with additional services and personalisation options may cost upwards of $5,000 to $10,000 or more.

It's essential to note that the exact cost of a prepaid funeral will be determined based on the specific choices and requirements you make while planning the service. To get an accurate quote and a better understanding of the costs involved, it is recommended to reach out to reputable funeral service providers in your area and discuss your preferences with them. They can provide you with detailed pricing information tailored to your specific needs and budget.

Is there any cut off period before death a prepaid funeral plan can be done?

There is generally no specific cut-off period before death to purchase a prepaid funeral plan. Individuals can opt for a prepaid funeral plan at any time during their life. However, it would be more beneficial if death is imminent or a possibility in the next 2 months, a pre-arranged funeral plan be done, where no funds change hands, but the funeral is planned out in advance. This way you not only avoid the additional fees relating to lodgment of the paperwork (normally around $200) but you also don't have to worry about the paperwork itself.

If you're interested in arranging a prepaid funeral, please contact us through our website.

We are happy to provide a free quote, which is valid for 6 months, so you don't feel pressured and can discuss with your family.

Fell free to call us any time: (03) 9540-9555

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