The ways you could pay for your funeral

16 June 2015

Ways to pay for a funeral

Funerals can be, and generally are, rather costly events; according to the Australian Securities and Investments Commission (ASIC), a funeral in Australian can cost anywhere from $4000 to $15,000. That seems  high but if you add up the expenses of a casket, funeral director?s fees, a crematorium or burial plot, and smaller things like flowers and memorial booklets, it becomes apparent that dying is an expensive business – expensive enough that many people/families won?t be able to comfortably cover it out of pocket. So how can you financially prepare yourself and your family for your own funeral? It turns out there are a few ways.


Funeral Insurance

Probably the first solution that will spring to mind, funeral insurance does what it says on the tin; you pay premiums during your lifetime and when you die, the insurance provider pays a lump sum to your family or nominated beneficiaries in order to cover the costs of your funeral. Premiums will vary based on factors such as gender and smoker status, and you can generally choose between level and stepped premiums. You can compare funeral insurance products here.

Canstar?s research has found that funeral insurance is more suited to those aged 60 or over, so there are other options to consider, such as:

Superannuation/Savings Account

In the event of your death, any balance you have in your super fund will be paid out, and can potentially be used to pay for your funeral. It?s important to note though that this money is unlikely to be paid out in time to cover immediate funeral costs, and in this case your family may have to pay for the funeral upfront and be reimbursed later.

Another way of covering your funeral expenses is a plain old savings account; regular contributions to an online savings account over a number of years should leave you/your family plenty to pay for your funeral. Make sure to try and find a fee-free account with a decent interest rate to make the best of your money. You can compare online bank accounts here.

Lost touch with your super? Don?t risk losing your life insurance


Pre-paid funerals

Like funeral insurance, pre-paid funerals are more or less what they sound like. You choose and pay for a funeral in advance, and you can choose whether to plan it at that point, or to leave that to your family in the future. However whatever you choose to do, make sure you know what you?re paying for by asking for a full list and description of all costs.

Pre-paid funerals can be paid in full or paid off using an installment plan; either way you?ll probably need to pay a deposit upfront. The main benefit of a pre-paid funeral is that there?s no risk of overpaying. However if you change your mind you may not be able to get your money back.

Funeral bonds

A funeral bond is an investment product designed to return enough profits to cover the costs of a funeral. The initial bond is deposited either as a lump sum or in installments, and then becomes a managed investment with interest guaranteeing a profit on top of the principal. However once the money has been deposited, it cannot be touched until the time of your death.

Funeral bonds can be set up either through an investment company or a funeral director, and are not subject to asset or income tests for the Age Pension. However money invested in a funeral bond say, ten years before death may not be enough to cover the costs of a funeral ten years later, so it?s important to consistently monitor both funeral prices and the balance of your funeral bond.


As long as you start thinking about your funeral in advance (in a non-morbid way of course), you and your family should be able to avoid any financial stress caused by your death (timely or otherwise).

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