Paying for your funeral
Making it easier for others
Funerals in Australia can cost anywhere from $4,000 to $15,000
depending on whether they are simple or elaborate.
If you want to make things easier for your family by paying in
advance for your funeral here are some options to consider:
How much does a funeral cost?
Most of us only find out about funeral costs when we need to
arrange the funeral of a family member or friend.
Funerals can cost from $4,000 for a basic cremation to around
$14,000 for a more elaborate casket, burial and flowers.
Here are the typical items you need to pay for when arranging a
- Funeral director fees
- Death certificate
- Burial / cremation
- Cemetery plot
- Other expenses, such as a celebrant or clergy, flowers,
newspaper notices and the wake
Find out more from ASIC's research report Paying for funerals:
how consumers decide to meet the costs.
Super and other ways to pay for
If you have super, when you die your super fund will pay out
your super balance and any life insurance to your dependents or
your estate. This money can be used to pay for a funeral but it can
take some time for it to be paid out. Your family may need to pay
for your funeral and then be reimbursed once probate is granted.
Talk to your super fund to see what approach it takes. See super death
benefits for more details.
You may be entitled to funeral payments from the Department of
Veterans' Affairs (DVA), your trade union, or your state or
territory government. See DVA: Bereavement assistance 13 32 54
(1800 555 254 for regional callers).
A bereavement payment may be available through the Department of
Human Services. See their webpage on what to do following a
death or call 13 23 00 (1800 810 586 for TTY service).
In some circumstances (like if you have a terminal illness) you
may be able to get hold of your super early to cover funeral
expenses. You may also be able to get your super early to pay
funeral expenses of a dependant. Go to the Department of Human
Services webpage on early release of
superannuation or see getting super early for more
Save for your funeral
You can save for your funeral by setting up a term deposit or online savings
account and saving until you reach an amount that will cover
the type of funeral you want. This could be all you need to do. You
may find that you can save enough money to pay for your funeral
Work out how long it will take you to save the money.
Compound interest calculator
Keep these savings separate from your everyday
This account will form part of your estate when you die, so
make sure you tell your beneficiaries about
the account so they can access it to pay for your funeral when it
Pre-paid funeral plans allow you to choose and pay in advance
for your funeral. This is important if you have strong cultural
reasons for wanting a certain type of funeral or certain features.
If you want to pay for the funeral up front but don't want to be
faced with all the details yet, you can pay for the funeral and
leave the details for your relatives to decide later.
You should ask for a full description of the costs to see
exactly what you are paying for. Funeral service operators who
don't reveal the costs of a funeral are in breach of the
Competition and Consumer Act 2010.
You can either pay for the funeral in full or pay it off in
regular instalments over a period of time. A deposit is usually
required but you can negotiate the amount you pay up
It's important to shop around when you are looking for a
pre-paid funeral as different funeral directors offer different
- Costs are fixed in today's dollars even if your funeral is not
for many years
- You can control funeral arrangements if you want to (such as
casket, flowers etc)
- You can pay in instalments over time
- Can be a lot cheaper than a funeral bond or funeral insurance
if you live for another 5-10 years
- Can be inflexible if you move interstate to live with family.
Some pre-paid plans are transferrable to different providers
- If you change your mind about a pre-paid funeral you may not be
able to get your money back. Check the terms and conditions.
Check for registration
Some states require prepaid funerals to be registered. The
following state fair trading offices can help you with more
information about prepaid funerals.
Funeral bonds are an investment product that can help you save
for funeral expenses. Funds can only be withdrawn after your death
to pay for your funeral.
Money invested in burial plots, pre-paid funeral plans or
funeral bonds (up to the Funeral Bond Allowable Limit) is not
subject to the asset or income test for the Age pension. See the
Centrelink's page on funeral bonds and
prepaid funerals for more detail on how Centrelink treats these
You can invest in a bond either directly through an investment
company, such as a friendly society or life insurance company, or
directly from a funeral director.
Many funeral bonds can be assigned to a funeral director of your
You can pay for the funeral bond in instalments but make sure
you understand all the costs before you sign up. You should read
the bond's prospectus to find out the
Case study: Alan gets a funeral bond
When he decided to retire
at 65, Alan wanted to get his finances sorted. Apart from sorting
out his will and other paperwork, he wanted to make arrangements to
pay for his funeral.
Alan didn't want to think about the details of the funeral
itself so he decided to purchase a funeral bond with some of his
retirement savings. He knew the investment would grow over time and
if he lived another 15 years the bond would cover all his funeral
costs. He was happy for his family to assign the bond to a funeral
director of their choice at the time of his death. He felt
satisfied that he had sorted out his funeral costs and his family
would not have to worry about them.
- Exempt from the asset and income test (the test used to assess
eligibility for the Aged pension)
- Keeps funeral money separate from other accounts and
- Good for people who want to pay in advance but may not want to
think about all the details
- As an investment, your savings will generally grow over time -
check out investment returns and information about fees in the
- You are not locked in to using a specific funeral director
- You can buy your bond upfront or you can pay in regular monthly
payments until you reach the chosen value of your bond. For
example, for a $6,000 bond, you may need to pay a deposit of
around $500 followed by monthly instalments of around $40 to $50
- If you pay in instalments and die before the bond is fully paid
for, you will only receive what you have paid into the bond and any
money earned on the investment
- Investment returns on your bond may not keep up with inflation.
(For example, if you invest in a $6,000 bond and die in 10 years
and your funeral is $8,000, your family or estate may need to top
up your bond to meet your funeral costs if the returns are not
enough to meet the total cost)
- Will not lock in the funeral costs in today's dollars
- You may not be able to get your money back if you decide to
discontinue the bond. Check the PDS.
Like other types of insurance, you pay monthly or fortnightly
premiums (ongoing payments) for a fixed amount of cover. Usually
you can choose between $5,000 to $15,000 cover which will be paid
to your beneficiary when you die.
With funeral insurance, you are not saving for funeral costs but
buying insurance to meet those costs at some future date.
Unlike taking out insurance for a car accident which is an
unknown event, we all know that we will die sometime. Because you
don't know when you are going to die, you need to think about
whether you can afford funeral insurance over the next 10, 20 or
Not only will you need to keep making payments over the years,
but premiums are usually 'stepped' which means they increase with
age and grow over time.
Funeral insurance premiums tend to rise steeply for people over
50 and this can cause people to cancel their policy in the first
few years, losing the benefit of premiums already paid.
If the premium payments become unaffordable for you and you stop
paying them, your policy is likely to be cancelled. You will not
get back the money that you have paid towards your policy.
Different insurers have different rules, so read the PDS carefully
before you sign up.
Read ASIC's media release on their 2015
funeral insurance report that shows how sharply premiums rise for
people over 50 and outlines the types of funeral policies that have
high cancellation rates.
Things to consider
Before you buy funeral insurance, check whether it is worth the
Will you be paying more for the insurance than the funeral will
actually cost? Have you considered other options you might have for
paying for a funeral?
Will your premiums increase and will you be able to keep paying
them? Think long term and remember if you can't keep up the
payments you are likely to lose all the money you have paid towards
Case study: Alice gets funeral insurance
Alice was 58 and still
working when she took out funeral insurance costing $20 per
fortnight. She wanted funeral cover so her family did not have to
worry about paying for her funeral.
By the time Alice was 71, her premium had doubled and cost her
more than $40 per fortnight. It had gone up every year as she aged
and to cover inflation. She struggled to pay the higher premium on
her much lower, post-retirement income. She also knew it would
continue to go up each year.
Alice added up all the premiums she had paid over the last 13
years and worked out that they had cost her more than $10,000.
Alice had a tough decision to make. If she stopped paying the
premium she would lose all the money she had already paid and if
she died her funeral would not be covered.
If she continued to pay her premium her funeral would be covered
but she would not be able to afford the things she needed.
Alice realised that she wouldn't be in this situation if she had
put the money into a savings account rather than towards funeral
insurance. If she had saved the money she would now have enough to
pay for her funeral and her fortnightly payments would have been
available for her to cover her everyday expenses.
Your insurance premiums will go up over time. The PDS will tell
you if your cover will also increase by the Consumer Price Index
(CPI) or by a predetermined amount - which will result in your
premium rising to cover the larger amount of cover. If you don't
want your cover to increase you can usually opt out of this, but
you must contact your funeral insurance provider. Check the
- You can get cover from day one but most policies only cover
accidental death in the first year or two
- Insurance may seem familiar and affordable when you take it out
and may suit you if you aren't sure if you can save for funeral
- Premiums generally go up over time. This means what started out
as a cheap way to pay funeral costs can become very expensive,
especially if you are living on a fixed income
- If you can't afford to keep up the premiums or want to cancel
your policy you are not likely to get back the premiums that you
- If you live another 5 to 10 years you may end up paying more in
premiums that the cost of the funeral. Visit the My Longevity website to work out
your life expectancy
- As most insurers only cover accidental death in the first 2
years, if you die from a terminal illness in this time you may not
be covered. Check the policy's terms and conditions.
- Sometimes it can take a while for your family to receive the
insurance payout to cover funeral costs.
Your own funeral can be hard to think about, but
if you want to sort it out in advance, make sure you check out your
options to get the best value for your money.
Last updated: 24 Jan 2017