Find out all about prepaid funeral plans, what they offer and how they compare to other options here with Savvy.
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Planning your final farewell may be a difficult topic to think about, but for many people having a prepaid funeral plan brings peace of mind. They offer you the opportunity to meticulously plan and pay for your funeral in advance. This ensures your exact wishes are known, and your loved ones are relieved of the financial burden of making difficult decisions during a time of mourning.
In this Savvy guide to funeral financing, we explore prepaid funeral plans, helping you understand how they work, their potential benefits, and what other alternatives you have for financing your final hurrah. Whilst we don’t offer comparisons between funeral plans or funeral insurance, we do offer free comparisons between different life insurance policies which can also cover funeral expenses.
A prepaid funeral plan is a financial arrangement that allows an individual to plan and pay for their funeral in advance. This ensures that their wishes are known and respected, and eliminates the financial burden on loved ones, who otherwise may have to pay the costs of a funeral up front. Such plans are particularly popular with seniors in Australia.
Prepaid funeral plans involve an agreement between an individual and a particular funeral director. The funeral director agrees to take care of all funeral arrangements in return for prepayment of the agreed cost for those services.
Steps involved in organising a prepaid funeral:
The funds you set aside for your prepaid funeral must be securely managed under funeral legislation which is in operation in several states in Australia:
These states have legislation requiring funeral directors to deposit prepaid funeral contributions into government-regulated funeral accounts. This legal oversight ensures that your money is protected, just in case the funeral director you choose goes out of business before carrying out your funeral wishes.
However, there is less legal protection available in the Northern Territory and the Australian Capital Territory, so extra caution is needed if you live in these territories.
There are many benefits offered by a prepaid funeral plan. These include:
Prepaid funeral plans offer financial security and peace of mind, allowing individuals to have control over their final arrangements while sparing their families an unexpected expense.
There’s many differences between prepaid funeral plans, funeral insurance, and life insurance with funeral cover. Here are the main differences:
| Prepaid Funeral Plan | Funeral Insurance | Life insurance with funeral cover | |
|---|---|---|---|
|
Purpose |
Pay for your pre-planned funeral in advance |
May cover the cost of the funeral, plus family funeral insurance is available |
Provides broader financial protection for one policyholder |
|
Premiums |
One-off payment or monthly instalments |
Regular premiums (monthly/annually) |
Regular premiums (monthly/annually) |
|
Coverage |
Fixed price funeral based on your chosen plan |
Choice of coverage amount from $3,000 up to $15,000 |
Varies, from $100,000 up to more than $1M |
|
Relative cost |
Dependent on the funeral plan chosen, paid for in instalments |
Average cost around $20-$60 a month |
More expensive than funeral insurance alone, but with greater benefits |
|
Waiting period |
No waiting period involved |
A 12-month waiting period for full coverage, during which time only accidental death covered |
Immediate coverage for accidental death, possibly 12 months for full cover |
|
Age restrictions |
No age restrictions |
Limited by age (usually 40-80) |
Available across a wide age range capped at around aged 65 |
|
Health assessment required? |
No medical required |
No medical required |
May require a medical assessment or report from doctor |
|
Inflation protection |
Price locked in to counter inflation |
Coverage amount may not keep up with inflation |
Benefit amount can keep pace with inflation |
|
Regulatory protection? |
Funds held securely in a registered funeral fund in most states |
Regulated by financial authority ASIC |
Regulated by financial authority ASIC |
Disclaimer:
Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.
Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.
For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
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© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
