Pre-plan your funeral
There are several ways you can pre-plan and pay for a funeral in advance:
- Some funeral service providers offer to sell you a funeral benefit agreement. These can be:
- a pre-payment plan for a funeral, burial or cremation
- a bond that covers the cost of a funeral, burial or cremation
- an agreement which does not include a funeral but provides for a specified amount of money to be paid on the death of the beneficiary
- Some companies offer to sell you insurance policies to cover the cost of a funeral
- You can self-insure to cover the cost of a funeral
Funeral benefit agreements
These agreements must be in writing and include the approved form known as a client care statement. A funeral service provider must complete and provide you with a client care statement form
The statement ensures the provider clearly outlines to you the following things associated with your contract:
- the services they provide
- the fees and charges you will pay
- what your responsibilities are
- that you have a cooling-off period of 30 days
- that you should seek legal advice to fully understand your rights and obligations.
Make sure you understand the details of your contract before you sign the client care statement or a funeral benefit agreement. Ask for a copy of the contract before you sign. Don’t be rushed into signing. Take it away to consider before signing. Seek advice from a lawyer or financial adviser and talk to your family and friends.
Serious fines apply if a provider doesn’t:
- give you the signed client care statement
- explain what the statement means
- retrieve and produce the signed statement when required.
For funeral benefit agreements, you automatically get a cooling-off period of 30 days. If you want to take advantage of this right to cancel the agreement you must provide the notice of cancellation to the provider in writing.
If you cancel in the cooling-off period, the provider must give you a refund. They may keep a $50 cancellation fee, but they must return the balance. They must do this within 7 days of receiving your notice.
Serious fines will apply if they don't give you the cooling-off period.
Some insurance companies sell funeral insurance products. These products provide a lump sum payment upon your death to help pay for your funeral and settle any other associated outstanding expenses, bills and accounts. Insurance products are regulated by the Australian Securities and Investments Commission (ASIC).
The Office of Fair Trading recommends you carefully consider the total costs involved in these types of insurance policies. Like other insurance policies, if you stop paying you will lose all the money contributed to the policy.
You can also take out a funeral bond which is a specialised investment which enables you to accumulate funds to meet future funeral expenses. An investment in a funeral bond is like a life insurance policy, whereby the benefit becomes payable on death.
For more information about funeral insurance see ASIC’s Moneysmart website.
Other arrangements and self-insurance
The cost of a funeral varies. It is impacted by many things, including the services and products included (funeral director, transportation, casket, flowers, vehicles, memorial videos, etc) and the amount of competition between funeral providers in the area.
In 2020 in Australia:
- the average cost of a direct cremation with no service was around $3,500
- the average cost of a funeral was around $8,000.
- the average cost of a premium funeral started at around $15,000.
You may decide that the most appropriate way to plan for your funeral is to set up a savings account to hold the funds that will be required and set out in writing your wishes with respect to how the funeral is conducted.
Copies of any pre-payment contracts, insurance contracts, funeral bonds or self-insurance arrangements should be provided to a family member and filed with your Will.
Queensland has a voluntary code of conduct for the funeral industry.