Tens of thousands of people are at risk of losing thousands of dollars because of a growing conflict of interest amongst those selling funeral bonds, says Australia’s first website to empower consumers around the funeral industry.

Peter Erceg, Founder of eziFunerals, says a funeral bond is an investment product that becomes payable on death and must be used to meet the cost of your funeral expenses— but there’s a catch.

Funeral bonds are now big business for the funeral industry. They are a way of getting quick money from unsuspecting families who know little about how they work. Our research has found that more and more consumers who go to a funeral home to discuss prepaying a funeral, are directed towards a bond by some funeral directors.


How do funeral bonds work?

There are two ways to invest in a funeral bond:

  • directly through a bank, friendly society or life insurance company, or
  • through a funeral director.


The consumer chooses the amount to be invested, either by planning the details of the service, or just by choosing a particular amount. The consumer can invest a lump sum, or pay in regular instalments. They are favourably treated by Centrelink with contributions up to $13,000 (as at 1 July 2018) generally exempt from the Assets and Income tests. As a result seniors may qualify for a higher Age or DVA pension.

However,  the very people who sell the product, usually funeral directors, encourage consumers to assign the bond to their business, meaning they can be accessed by the provider in a clear conflict of interest.

Consumers don’t know or are not being told that funeral bonds do not have be assigned to a funeral director allowing more freedom of choice later.

If a consumer assigns or nominates their funeral bond to a funeral director, then upon their death the nominated funeral director is entitled to their total investment and accumulated bonuses to meet the funeral expenses. Any residual funds, if any is left, will be paid to the estate upon receiving satisfactory evidence that the funeral service has been performed.


Should you assign your bond to a funeral director?

The lesson here is that if you want your beneficiaries to control your bond, then don’t assign or nominate a specific funeral director. This way, your investment and accumulated bonuses can be paid directly to your legal personal representative, usually your estate representative, to be applied towards your funeral expenses.”

People should check their policy and consider un-assigning their policy from a nominated funeral director to themselves or a beneficiary. This way, your investment is protected, and your legal representative will have the flexibility to ‘shop around’ and avoid the potential of being ripped off.

By pre-planning your funeral with eziFunerals, and allowing your representative to ‘shop around’ and get quotes your family will save thousands of dollars’. Then, any excess funds remaining in your bond, after the funeral expenses, will be paid to your estate and not the assigned funeral director.


About eziFunerals

eziFunerals is a free consumer advocacy and funeral planning platform that supports individuals and families cope with end of life decisions, death and funerals. We are an independent, Australian-owned and operated company, and are not a subsidiary of any other corporation. We are not part of any other funeral company. Founded by consumers frustrated by how difficult it was to get independent information, eziFunerals supports consumers plan a funeral, compare prices and select the right funeral director anywhere, anytime.