Choosing funeral cover
There are many ways to pay for a funeral, but some may be more suitable for you than others. So take your time and consider all options. Don’t rush into a decision.
One way to pay for a funeral is to save for it. You can set up a savings account, separate to your everyday account, then you can pay into it how much you want and as often as you want. Tell your family or trusted friend about the account and what it is to be used for.
If you want to arrange funeral cover you could look at a pre-paid funeral plan, funeral insurance, or a funeral bond.
Pre-paid funerals let you pay for a funeral in advance through your funeral director. You can pay either in one lump sum, or make a deposit and pay instalments over a fixed period. You can choose the type of funeral you want, and pay for the cost of the funeral at today’s prices.
Funeral insurance is not savings. If you stop making payments you will lose your cover and in some cases, may not get a refund or payout for a funeral. Be aware you might end up paying a lot more than the actual cost of the funeral.
Funeral bonds are invested usually by a friendly society or an insurance company and will grow in value. The money can only be used for your funeral. You may not be able to access the money earlier.
If someone comes to your door selling funeral cover you don’t need to sign up straight away. Ask for a copy of the brochure and tell them you'll think about it. Never feel pressured into buying anything. If you would like to buy funeral cover then find out which option is best for you.
In Queensland, a funeral provider must give you a Client Care Statement when you take out funeral cover. This document clearly outlines the fees and charges you must pay, as well as the services you will receive. In addition, when you buy either a pre-paid funeral plan or funeral benefit arrangement, you automatically get a cooling off period. This is a set time where you can cancel the cover and get your money back if you change your mind. The provider may keep a $50 cancellation fee, but they must return the balance.
Here are some tips to consider before buying funeral cover:
- Check if you already have funeral cover (e.g. through your superannuation or health insurance policy).
- If you want to buy a funeral product find out how much you will need to pay and when, and how much the product will cost you over the long term.
- Find out what the rules are if you stop paying, and when the company will not make a pay-out.
- Be careful signing up children. If you buy cover while your children are young, you might end up paying a whole lot more than what the funeral will cost.
- Talk to someone you trust, such as another community member or a community worker, before you sign up for funeral cover.
Watch the below 'Avoid a funeral R.I.P off' video.
Funerals can be expensive, so you might choose to plan and save for a funeral now to ease the burden later.
But when the time comes, you want to make sure the money will still be there and that there will be enough.
You may already be covered without realising it. Your superannuation or health insurance policy may include life insurance or pay a funeral benefit.
Your family or your carer may be able to get help to pay for the funeral.
Check what help may be available from your local Indigenous Lands Council, your local Indigenous organisation or the Department of Veterans Affairs if you have served in the Defence Force.
Centrelink also offers a bereavement payment to eligible family members and carers to help them adjust to the change in their financial situation.
If you decide to arrange a funeral cover separately, there are a few different options, but some may be more suitable for you than others.
One of the easiest ways to pay for a funeral is simply to save for it. Set up a savings account and then deposit how much you want, when you want. You won't lose money if you stop making payments or if you can't deposit money every fortnight.
Speak with your bank first to make sure your family will be able to access the money quickly when you pass away.
Prepaid funerals let you pay for a funeral in advance through your funeral director. You can pay in full or make regular payments over time. You can choose the type of funeral you want and pay for the cost of the funeral at today's prices.
Before you sign up, check if you can get a refund if you change your mind.
In some states, funeral directors must put your payments into a registered funeral fund, which protects your money if their business goes broke.
Funeral bonds may be offered by funeral directors, friendly societies or life insurance companies. You can pay as lump sum or make regular payments.
The money is invested and will grow in value. It can only be used for your funeral and normally can't be accessed earlier.
If you sign up for funeral insurance, sometimes described as a funeral cover or a funeral plan, you will need to make regular ongoing payments, which may increase over time.
Ask how long you will be making payments. Some policies require you to make these regular payments until you pass away.
Be aware that you may end up paying a lot more than the actual cover you will get.
Ask about when there won't be a payout. Some policies don't pay in the first two years in certain circumstances. And with most funeral plans, if you stop paying then you'll lose all the money you have paid.
If someone comes to your door selling funeral cover, don't sign anything. Just ask for a copy of the brochure and tell them you'll think about it. Never feel pressured to buy anything.
Be careful signing up children. If you sign them up when they're young, you might end up paying a whole lot more than what the funeral will cost.
Before you sign up, talk to someone you trust, such as another community member or a community worker before signing up for funeral cover. And see the booklet Paying for Funerals for more helpful tips.
If you are having problems with a funeral product you've bought, talk to a financial counsellor. They offer a free service to help you sort out money problems. Or you can call your local consumer protection agency.
So remember, see if you already have cover and, if you are thinking of getting cover, think about different options available and consider which features are best for you. Ask questions before you sign up and talk to your local consumer protection agency if you have any questions.
Funeral providers must obey the Australian Consumer Law. They face serious penalties if they don’t uphold your consumer rights.
There is also a voluntary code of conduct for the Queensland funeral industry.
If you are having problems with a funeral product you have bought, talk to a financial counsellor. They offer a free service to help you sort out money problems. You can call the Indigenous Help Line at the Australian Securities and Investments Commission on 1800 007 007 or contact us to make a complaint about the funeral product.