There is a big push by some funeral companies to tout the benefits of the pre-paid plans they sell. They urge customers in Sydney and Melbourne to pay for their own funeral in advance—in order to spare their loved ones the trouble and expense and lock in current prices.
Although these companies will always tell you about the pros of prepaid funeral plans, there are also lots of cons that you should be aware. But don’t just take our word for it!
The recent Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry (the Royal Commission) raised some serious findings relating to some prepaid finance products.
Choice, Australia’s leading consumer advocacy group, has claimed that some funeral providers are unfairly profiting from Australians who purchase pre-paid plans. “Australians don’t always get the full benefits when it comes to prepaid plans,” Choice’s investigative journalist Saimi Jeong said.
The Australian Securities and Investments Commission’s Moneysmart website also cautions that prepaid funerals can be inflexible and it may not be possible to get your money back once you’ve paid for your funeral, should you change your mind later.
What are the risks of prepaid funerals
The truth is that it is usually not wise to pay ahead. No matter how attractive the funeral home makes it sound, there are serious drawbacks to prepaid funerals near you that some funeral homes will not tell you about.
Things you should consider:
- If you cancel, move or change your plan, you may not receive a full refund.
- The money you pay for funeral arrangements now won’t be available for emergencies later.
- Money spent today may not cover future funeral costs, which could result in the use of cheaper products or requests for additional money.
- Family members may not be aware that funeral costs have been paid, and may pay at a different funeral home.
- If you die interstate and your family employs another funeral home there, it may be difficult to get a refund.
- By the time of your death, the funeral home may have a poor reputation, or be out of business entirely.
Are there better options?
There are much safer and better alternatives to prepaid funerals in Perth and Adelaide, such as setting up a special bank account, recording your funeral wishes (pre-need planning) and shopping around. These options reduce the risk of losing your money and provide your family with much greater control when the time comes.
Set up a Funeral bank account
According to Moneysmart, the simplest way to pay for your funeral is to save up for it. Set up a term deposit or savings account separate from your everyday bank account. Remember to tell your family and beneficiaries about it so they can use your savings to pay for your funeral. (Don’t nominate a funeral director as a beneficiary).
Record your funeral wishes
With eziFunerals, you can record your funeral wishes in advance by filling out a pre-need planning form. You can then store it in a secure Dashboard. You can also appoint your funeral guardian/s. Most importantly, be sure to tell your family about your plan. Walk them through every detail. Give them copies of your written funeral wishes.
Shop around and get quotes
By comparison shopping, you can make reasonably priced funeral arrangements, without setting aside large sums of money or prepaying anything. eziFunerals helps you get detailed quotes from several multiple homes —and compare prices. You’ll see big price differences for essentially the same goods and services. Visit our list of independent funeral homes, and choose the one you like best.
Your family will have to make choices after you die and you cannot just prepay these choices away.
You and your family will enjoy greater peace of mind, if you just simply plan ahead without the need to pre-pay your funeral up front. By planning your funeral in advance, your family will be more empowered to shop around and make your funeral arrangements much easier. But if you decide to pre-pay your funeral in advance, be very cautious and read the contract.
eziFunerals supports individuals and families cope with end of life decisions, death and funerals. We are an independent, Australian-owned and operated company. We are not part of any other funeral company.
Our member Funeral Directors operate in Sydney, Melbourne, Brisbane, Perth, Adelaide and Australia wide. They are chosen for their knowledge, quality, service, personalisation and experience. They go above and beyond, and will take the time to support the family.
For more information or to make contact with a trusted Independent funeral director, call eziFunerals on 1300 236 402 or visit www.ezifunerals.com.au.