Paying for funerals

Planning for funeral costs

Senior man and woman with a young boy sittingFunerals can be expensive. There are different ways to cover the cost of your funeral so don't rush into a decision. Find the one that's right for you.

You may already have funeral cover

Read our Paying for funerals booklet

Paying for funerals booklet coverIf you're thinking about planning ahead for your own funeral or the funeral of a family member, our paying for funerals booklet can help sort through the different options you might have.

Before buying a funeral plan or funeral cover, check the following options:

  • Is there a life insurance policy with your superannuation or a health insurance policy that pays a funeral benefit, which may help with funeral expenses? See check if your super has life insurance.
  • If you are the surviving partner of a person receiving a Centrelink benefit, you may be entitled to bereavement payments. Contact the Indigenous Call Centre on 1800 136 380 or go to the Indigenous Australians section of the Department of Human Services website.
  • Veterans or former members of the defence forces, members of pensioner associations or trade unions may also be able to access financial assistance to help meet the cost of a funeral. Contact the Department of Veterans' Affairs on 133 254.
  • Does your local Aboriginal or Torres Strait Islander community organisation or land council provide any funeral assistance?
  • Can the state or territory government assist with the cost of a basic funeral or cremation?
  • Get help from a financial counsellor or talk to a financial capability worker as they can help you decide which option is best for you.

When thinking about your options, find out what happens to the money when you die. Sometimes your family won't get the money straight away. They may have to pay for your funeral themselves and wait until your will has been settled before they can get the money back.

Video: Avoid a funeral rip-off

Video about avoiding funeral insurance rip offs

This video explains how to avoid paying too much when it comes to funeral insurance and what sorts of options you have.

Check if your super has life insurance

If you have a life insurance policy with your super, your super fund will pay a sum of money to your dependants when you die. This is called a death benefit and your dependants could use part of it to pay for your funeral.

Smart tip

Let your family know which super fund you are with and your account details.

Phone your super fund and ask them if you have a life insurance policy or if you could buy one. Getting life insurance through your super fund could be a lot cheaper than elsewhere but remember to still check the fees, terms and conditions.

Even if you don't have a life insurance policy with your super, the amount of super you have will be paid out, usually to your dependants, when you die. Some or all of this money could be used to pay for your funeral. This may take some time so your family might have to pay for your funeral themselves until your will is settled.

If a friend or a relative dies and they were dependant on you, you may be able to access your super early to cover the costs of their funeral. Talk to your super fund or get help from a financial counsellor.

Create your own funeral fund bank account

Set up your own savings account for the cost of your funeral. Talk to your bank, building society or credit union about opening a savings account with a high interest rate. Decide how much you want to save each week or month. Keep this account separate from your everyday account. Tell your family about the account and what it's for. See savings accounts for more information.

Consider putting money into a funeral bond

Funeral bonds are offered by friendly societies or life insurance companies. You set aside regular amounts of money or a lump sum payment for your funeral. The money is invested and will grow in value. It can only be used for your funeral and normally can't be accessed earlier.

Consider buying a prepaid funeral

Prepaid funerals allow you to choose the type of funeral you would like. You can either pay for it in full or pay it off over a period of time. If you are thinking of buying a prepaid funeral, ask if you can get a refund if you change your mind. Some states require prepaid funerals to be registered. Your local state and territory fair trading office can help you with more information about prepaid funerals. To contact your state or territory fair trading office see get help with money

Funeral cover

Senior woman with a young woman and babySalespeople might come to your house selling funeral cover or you might see advertisements for it on TV or in the paper. With funeral cover, you make regular ongoing payments until your death. When you die, your family receives an amount of money to cover the cost of your funeral.

Some Indigenous organisations offer funeral cover, as do private companies. If it is important to you that a company is owned by Indigenous people, check with ASIC or community leaders.

Be aware that you may end up paying a lot more than the actual cover you will get. For example, if you start paying for funeral cover when you or your family are very young, you might end up paying a lot more than a funeral would cost. Also, if you miss payments or cancel the policy you might not get a refund of your payments. Read the product disclosure statement (PDS) or brochure, which tells you what happens if you cancel. Take your time to think carefully and not be pressured into buying funeral cover.

Video: Understanding funeral plans

Understanding funerals video

Joel's shocked by what he finds when he checks out a funeral plan his Aunty wants to buy. This video features Joel and Naomi Wenitong from The Last Kinection. 

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. Read door-to-door sales for more information and listen to our audio segment on what to be aware of when you're paying for funeral cover.

Case study: Susan got funeral cover but couldn't afford it

A salesperson came to Susan's house selling funeral cover. Susan felt she couldn't say no when he asked if he could come into her house. She felt pressured to sign up and soon, $42.50 was coming out of her Centrelink benefits every fortnight for a funeral plan for herself and her three kids. Susan found she couldn't afford these payments and talked to a financial counsellor about how she could cancel the cover.

Once you have decided how you will cover the cost of your funeral, discuss it with your family. Make sure they know where you keep your will and any other important papers.

Related links

Aboriginal and Torres Strait Islander people are advised that this website may contain images and voices of deceased people. 

Last updated: 29 Mar 2018