What is a Funeral Bond?

In a previous blog post, we talked about why preplanning and prepaying your funeral or cremation makes sense. You can find that here. When prepaying for your funeral, the most common way to formalise this is by setting up a Funeral Bond.

A Funeral Bond is a type of "investment" that allows you to allocate funds specifically for funeral expenses, with the money only being accessible after your passing. You have the option to pay a lump sum or make regular contributions, and the funds accrue interest, but they cannot be withdrawn early for other uses. These bonds provide tax-effective savings and can be excluded from government income and assets tests up to $15,750, offering a way to plan for funeral costs without financially burdening your loved ones.  

A regular Funeral Bond is simply money that is set aside and accrues a little interest over time. This money then contributes to covering some of the costs involved in a funeral when the time comes. However a "prepaid Funeral Bond" sets a fixed amount aside which - in conjunction with a fixed-price contract - will cover the costs of the agreed services required. For example, when using the prepaid option, if you preplan a full funeral for $8,500, once this amount is paid into the Funeral Bond, upon your passing there is no more to pay for the contracted services you signed for. It's literally prepaid! What a great idea!

So, conventional funeral bonds put some money aside without necessarily agreeing on a final amount for the funeral. A prepaid option will include a contract that outlines the funeral services you are paying for, and there is no more money to pay once that agreed amount is paid into the Funeral Bond.

For conventional Funeral Bonds, we generally use SurePlan Gold. You can find out more by going to their website: https://www.sureplan.com.au/funeral-bond/

For fully prepaid Funeral Bonds, we generally use Funeral Plan Management. They are owned by Australian Unity. You can find out more here.

We'd be glad to answer any questions you have about Funeral Bonds. Feel free to call us any time on 07 3544 6880. Alternatively, you can email us at admin@evermorefunerals.com.au