Funeral bonds can offer a financial solution when planning for the inevitable. But what exactly are funeral bonds, and do you really need them?
In this article, Anton Brown Funerals aims to shed light on the purpose, advantages and disadvantages of funeral bonds to help you navigate this often-overlooked aspect of end-of-life planning.
Anton Brown Funerals will give you our verdict on funeral bonds and give our advice on what funeral bond plan we recommend.
What is a funeral bond?
Funeral bonds, provided by friendly societies or life insurance companies, enable individuals to allocate funds specifically for their funeral expenses. These bonds solely offer benefits upon the demise of the designated individual and cannot be accessed before that time.
Funeral bond features
Funeral bonds, also known as funeral investments, possess the following features:
- Financial product that generates interest
- The funds are held in a separate funeral account managed by an independent entity
- The interest earned is added to the principal amount, and the funds can only be released upon your demise to cover funeral expenses through either your estate or directly to the funeral director
Do you need a funeral bond?
It ultimately depends on your personal preferences and circumstances. Consider the advantages and disadvantages carefully before committing to a decision.
Advantages of funeral bonds
Some advantages to consider are:
- Provide a secure way to set aside funds for funeral expenses
- By pre-paying for your funeral expenses, you can prevent your loved ones from shouldering the burden of these costs later on
- Some plans reduce aged care costs.
- Some plans allocate investment returns and bonuses
- Convenience
Disadvantages of funeral bonds
Some disadvantages of funeral bonds include:
- Some plans lack flexibility – you may be locked into a product or provider, making it difficult if circumstances and preferences change over time
- Lower interest rates compared to some other investment options
- Potential fees and costs
- May impact government benefits (See funeral bond Centrelink below)
- Some are not regulated by the Australian Prudential Regulation Authority (APRA)
Funeral bond Centrelink
Self-funded retirees who are receiving a partial pension or are just above the pension threshold should take note of the fact that they can make contributions of up to $15,000 (as at 1-7-2023) towards funeral bonds without affecting their Centrelink or Department of Veterans’ Affairs Income and Assets Test.
Your funeral bond will be considered a financial investment if it does not meet the exemption criteria. Consequently, both the current value of your share and any interest earned will be regarded as assets.
Additionally, any income generated from this investment will be deemed as part of your overall income for Centrelink purposes.
For more on how Centrelink assess funeral bonds, visit Services Australia.
Funeral bonds Australia
Anton Brown Funerals understands the importance of trust and reliability in funeral services. That’s why we strongly advise against pre-paying for funeral services without thorough consideration.
While most funeral directors are ethical and responsible, a small percentage may not fulfil their obligations, leaving families distressed during an already challenging time.
Individuals can thoroughly research and select a reputable funeral director by choosing not to pre-pay for funeral services. This allows families to make informed decisions about their loved one’s final arrangements while ensuring that they are working with a trustworthy professional.
While it’s essential to acknowledge not all funeral directors fall short of their responsibilities, Anton Brown Funerals believes in cautionary measures that empower individuals during difficult times. We believe ethical Funeral Directors shouldn’t accept pre-paying.
By opting against pre-payment for funerals, people can advocate for themselves and safeguard against any unforeseen issues that may arise down the road. It is important to carefully consider this decision and consult trusted professionals like Anton Brown Funerals before making any commitments.
Sureplan Friendly Society
Anton Brown Funerals can highly recommend Sureplan Friendly Society to anyone considering a funeral bond. Their easy-to-use platform and fast payout options make the entire process stress-free.
Unlike other providers, Sureplan understands the importance of ensuring that families are taken care of during difficult times, and they go above and beyond to provide outstanding customer service.
What sets Sureplan apart from competitors is its efficient system and commitment to delivering peace of mind. They offer flexible payment options, allowing you to choose what suits your financial situation best. This ensures that you have complete control over your investment while guaranteeing that your loved ones will be looked after when the time comes.
By choosing Sureplan, you can rest assured knowing that everything will be taken care of promptly and efficiently, giving you space to focus on grieving and cherishing memories instead.
Funeral bonds: a wise investment or an unnecessary expense?
This article delved into the advantages and disadvantages of funeral bonds, their necessity and how they may affect government payments.
The decision to obtain a funeral bond is based on personal preferences and each individual’s unique situation.
Anton Brown Funerals believes ethical Funeral Directors shouldn’t accept pre-payment for funerals and instead suggest using Sureplan Friendly Society to anyone considering investing in a funeral bond.
If you’re still undecided about whether to opt for a funeral bond, reach out to Anton Brown Funerals today for further guidance.
Anton Brown Funerals is a family-owned, Queensland funeral company which was established in 1995.
Our Brisbane-based team of funeral directors are honest, professional, compassionate and understanding, and always put our clients and their needs first.
We go above and beyond to ensure your loved one’s funeral arrangements are tailored to their final wishes and can assist you with burials, cremations, coffins, floral arrangements, pre-planning and more.
If you need help organising a dignified funeral service, we are available to discuss arrangements 24/7, so please don’t hesitate to reach out to us today on (07) 3217 3088 or send us a message online here.