Prepaid Funerals Vs Funeral Insurance
Updated: Jul 27, 2018
We take a good look at the pro's and con's of Prepaid & Funeral Insurance and which is best for you.
We know the thought of planning and thinking about your funeral can be a hard and at times daunting process. We know how you feel, however, no matter how easy it is to avoid at some point it will sadly need to be addressed. There are two main ways to preemptively look after your funerals so that your family and loved ones are not going to bed burdened by the financial side. The first is Prepaid Funerals; these are normally done through a funeral director and are a lump sum payment up front. The second being Funeral Insurance.
"Funeral insurance premiums can be more than $153 per month."
- CANSTAR 2017
Funeral Insurance normally can be paid from the age of 36 upward, however, some institutions have much later starting dates with some only allowing people older than 50 take out insurance. The thing with this is, unfortunately, every year you age the cost of your premiums goes up.
There is also the issue of expulsion/s some funeral insures will not insure you if you have specific medical conditions. some insurers will not cover you for 12 months, and also won't cover accidental death or suicide for the first 12 months as well.
On top of these exclusions, things like smoking status, previous medical history and even your sex can be a cause of premiums to rise. For instance the average premium for a female is $84.03 per month; however, the male average for the same age is $89.16. That's a difference of $5.13 a month or $61.56 per year for something you have no control over.
As you can see in the above table if you're to have Funeral Insurance until the age of 80 you would have spent in excess of $15,000. unless you take it out aged 72 which would see you still pay the highest premium of $153.05 per month and cost you around $14,600 by the time you're 80.
That's not to say that Funeral Insurance doesn't have its benefits. Getting funeral insurance later in life when you believe that death is only a few years off or have a palliative condition (providing the Funeral Insurance company will cover you) it can be a slight money saver. If you look at the highest paying premium bracket, those above 72 you would pay approximately $1,836 per year for Funeral Insurance. This is by far less than your basic funeral package any funeral director could quote you. As stated before most companies have a year-long exclusion period for most of their covers, meaning you are likely to pay around the $3,600 mark. which is already $1,300 above Australian Funerals & Cremations Basic cremation package and $400 more than Australian Funerals & Cremations Basic Funeral package. keep in mind that the Funeral Insurance will cover more than a basic funeral (in most cases).
Prepaid funerals are exactly what the name states, they are funerals that you pay for before you need them. Firstly we will look at the process around Prepaid Funerals, unlike Funeral Insurance, Prepaid Funerals are not done online and require face-face time with a funeral director. The funeral director will sit down with you and/or your loved one/s and go through a list of all the questions surrounding your funeral; questions such as: What coffin would you like? Would you like to be buried or cremated? And would you like a funeral or just a simple cremation.
A very simple and straightforward cremation Prepaid with Australian Funerals & Cremations starts from $2,500. This number is a basic number, depending on what you want in you funeral package the price will change. With Australian Funerals & Cremations we itemise our costs we offer 100% transparency.
Once all is agreed upon, the bulk of the money will go into a trust with the Life Plan (Australian Unity) this is highly regulated by the federal government, some of the money is used to buy your burial plot (if you have chosen to be buried) and also to be used to pay administration fees.
The money in the trust and the burial plot is all yours and in your name, it is only used when it is required to pay for your funeral.
In the worst case scenario if the funeral director goes bankrupt; the money in the trust is still yours and you can either withdraw it or have it transferred to another funeral director (which is the wise choice, so you don't have to pay administration fees again).
Why go with a Prepaid Funeral? Well simply put you will save money in the long run. There are no restrictions, no exclusions and no ludicrous difference in price due to a person sex. Pay today's price for tomorrow. it's that simple.
One of saddest things we come across is a family being crippled by financial burden trying to give their loved one the funeral they deserve or a family riddled with guilt for having to go for a simple funeral or cremation simply because they cannot afford to give their loved one the send-off they wanted. Prepaying your funeral is a great way to avoid burdening your loved ones.
Keep in mind just because you Prepay your funeral doesn't mean that your family can't add to it.
For instance, if you choose a simple cremation ($2,300) and your family decide they want to have a funeral ($3,200) it's as simple as calling us and we can arrange it. this may only cost your family $900 and not leave them to find the $3,200 if you hadn't Prepaid your funeral.
The only downside to Prepaying your funeral is that payment is a lump-sum which is understandably hard to obtain.
To see more information about Australian Funerals & Cremations Prepaid Funerals click here
Contact us for more info:
Phone: (03) 9540-9555