Organising a funeral is a very stressful and emotional process, and it can also be a financially difficult time.
Funeral arrangements can be costly, although they differ widely in Australia. Cost can vary according to features like the type of service, burial or cremation preferences and extra features like flowers, catering, and transport. Regardless, knowing how to finance a funeral can lessen the financial pressure and enable families to make better decisions.
Personal Savings
Using saved personal cash is quite common for funeral expenditures. Many families lean on their own funding to cover immediate expenses. This option can be especially difficult in cases of sudden death where you have little time to plan.
Prepaid Funeral Plans
A prepayment funeral plan lets you pay for the cost of the funeral in advance. This process locks in the price and spears payments, making it easier to afford. Such plans also include flexibility over factors like service, location and flowers.
With prepaid plans, the funds are kept either in a trust or under the supervision of a funeral bond. Such an arrangement can be very beneficial, but it’s advisable to read the small print closely.
Funeral Insurance
Funeral insurance lets you pay regular premiums and in the event of a death, the insurer will cover the funds of the arrangements. However, it is worth considering the implications for ongoing affordability over the years because eventually the total premiums paid may well exceed the actual cost of the funeral.
Prior to buying funeral insurance, make sure you are very well aware of the conditions attached to the policy including exemption clauses, waiting periods, and what will happen if you miss a payment.
Funeral Bonds
A funeral bond is a safe investment aimed towards funding funeral expenses. Money invested in a funeral bond can only be used for funeral purposes, ensuring the money is set aside for that specific purpose. In Australia, funeral bonds are exempt from the asset tests conducted by Centre-link and the Department of Veterans’ Affairs, making them attractive for people on government benefits.
Funds deposited into funeral bonds can be used as an individual or joint investment, with interest potentially accrued over time. There is no promise of a fixed funeral cost, but bonds provide a special reserve of funds that will help reduce financial pressure.
Government Assistance
Government assistance is often available for families struggling to meet the cost of a funeral. Such payments would be made to qualified partners or minders after the death of someone close to them.
Most of the time, the criteria and amounts for each case, program and area differ widely with regard to assistance for funeral expenditure.
Community and Charitable Support
Community and charity organisations often provide families with some financial assistance in cases where bereavement makes it very difficult to afford a funeral. This could either be through cash donations or free goods or services. Religious institutions, cultural groups, and even local charities tend to help with providing this kind of assistance, especially if the deceased was an active member of the community.
This is a way to approach potential resources; however, there are different qualifying criteria, and availability varies, so it’s best to contact them directly for information.
Crowdsourcing
Funeral expenses are well suited for online fundraising, recently termed as crowdsourcing. These websites let families set up fundraising campaigns that can be shared with friends, family, and community members. Crowdsourcing has become a prominent and convenient option because immediate cash is required after someone’s sudden death.
Crowdfunding has led to fantastic achievements but is notoriously sensitive and demands high transparency. As such, you need to make it absolutely clear what the cash is for and be accurate when citing the amount of cash needed.
Paying Through Instalments
Most funeral homes offer payment plans for funeral costs. This enables the arrangement of payments for the services paid for, over time, drastically reducing the financial sting of lump-sum payments. Payment plans are usually tailored according to individual situations, with flexible terms and repayment schedules.
Always clarify the terms of a payment plan, including any interest or other fees costing you before committing to the plan. Ensure that you can manage it within your budget to avoid financial trouble in the future.
Contributions from Families
Another way to finance a funeral is to bring family resources together. Families pool funds to share the costs with all members, ensuring no one has to bear the full burden. It will also help unite a family and strengthen the relationship during this trying time.
Communication should be encouraged up front and everything regarding contributions and costs should be made as clear as possible. An agreement between members on the details regarding cost expectations and contribution can help avert misunderstandings or conflicts.
Final Thought
Financing a funeral can be burdensome and thus one needs to know what options are available to facilitate the process. Personal savings, prepaid plans, insurance, and community involvement are some of the channels that can be considered based on the unique circumstances and preferences of an individual.
In an ideal situation, planning should involve pre-arranging funeral expenses, which may cut the stress of the loved ones, ensuring a fitting farewell. Those needing immediate assistance should look at government schemes, charities, or crowdfunding platforms for some cash. Proactive and informed steps will ensure that families do the right things to honour their loved ones while not compromising their own financial well-being.