At Australian Pensioner Funerals, we assist families around Melbourne, the Mornington Peninsula and Geelong to better understand available options for ensuring funerals are paid for in advance. The two most commonly chosen options available are prepaid funeral plans and funeral insurance plans. Contact our team today to discuss prepaid funeral plans and arrangements for the future.
Cost Structure Differences
The payment structure is one of the fundamental differences between prepaid funerals and funeral insurance plans. With a prepaid funeral, the cost of the chosen funeral package is paid either up-front in full or in instalments via a predetermined plan. Once all the necessary payments have been made to cover the cost of the funeral service, that service is guaranteed to be performed as per the agreement. A funeral insurance plan is like most insurance plans and requires a policy where ongoing payments are required, often for many years, in return for payment of a specified amount when the funeral is required.
Long-term Financial Value
For many people, considering the financial benefit over the long term, prepaid funerals are considered to be more secure and of better value. When the funeral has been prepaid, future increases in funeral costs will not affect the services agreed upon.
While funeral insurance can offer some degree of flexibility, premiums do have a tendency to rise over time depending on your chosen plan. It is not unusual for the total amount of premiums paid to surpass the eventual payout of the benefit. As funeral costs are rising, it is worth considering whether the payout amount initially agreed upon will be sufficient at the time a funeral is required.
The money that you have paid for a Prepaid Funeral is invested in a secure bond in your name. It will always be available to use for the cost of a funeral. With Funeral Insurance, if you cannot pay the premiums during challenging times, it is likely your policy will be cancelled. In these circumstances, the money you have paid will not be refunded to you and there will be no funeral benefit.
Control and Flexibility
Prepaid funeral plans offer an additional benefit in that they allow people to finalise the details of their own funerals in advance, paying for the funeral they would like. This includes deciding on whether they would like to be buried or cremated and the type of funeral service they would like. By having these choices in writing and paid for, uncertainty for families is alleviated and personal wishes are honoured. Most funeral insurance plans are limited to simply providing a financial benefit and do not involve detailing the type of funeral or other related arrangements that you prefer.
Eligibility And Policy Conditions
Another factor that should be considered with funeral insurance plans is their eligibility and the conditions of each policy. Most insurance plans have specific conditions attached. Premiums also vary widely and are generally based on age and the benefit value selected. Prepaid funerals do not involve the same level of complex policy terms and conditions. Prepaid funerals usually are most straight forward, providing clarity with the same pricing and conditions for all.
What Is Best for Families in and around Melbourne?
The ideal option will vary depending on each individual’s financial plan, future goals and personal choices. A prepaid funeral plan usually suits people who like the assurance that arrangements have been made with their preferred funeral service and paid for in full, in advance. An insurance plan may be considered by those who prefer the model of ongoing payments and leaving the decisions related to their funeral to those claiming the insurance.
Make a Confident Decision
To make a confident decision when wanting to pay for your funeral in advance, understanding the key differences between funeral insurance and prepaid funeral plans will provide clarity. Both options are designed to cover funeral costs and will contribute to the cost of your funeral. While both have financial benefits when considering payment for a funeral, they are very different approaches. Your personal circumstances and preference in how your funeral arrangements will be managed should assist in deciding whether a prepaid funeral or paying funeral insurance is the best fit for you.
For further information on our prepaid funerals, visit: APF Prepaid Funerals
Or contact our helpful and experienced team at Australian Pensioner Funerals on (03) 9419 0004 or through our contact page to chat about planning for your funeral in the future.