Prepaid funerals: What you should know

Prepaid funerals are growing in popularity, largely because they allow you to lock in today's price. When a loved one dies, the cost of paying for their funeral often comes as a shock, even if the death was expected. The average price of a funeral in Australia is around $7,500 (according to Finder) but it is common for funerals to cost upwards of $10,000.

Traditional funeral directors need the invoice to be paid up-front, forcing many Australian families into severe hardship. Prepaid funerals are a secure way to reduce the future financial stress on families when the time comes.  

In this article, we've answered the most frequently asked questions about Bare prepaid funerals. We hope it helps to offer more peace of mind if you are considering planning ahead.

1. What is a prepaid funeral?

A prepaid funeral is simply a funeral that is paid for in advance of needing it. Once paid, every cent of the prepayment is held in trust on your behalf until the funeral director needs to carry out the service.

2. Why do people choose prepaid funerals?

People generally prepay their funeral for three key reasons:

• To protect their family – Most people prepay to save their family from the stress of organising a funeral service and taking away the financial burden of their passing.
• To lock in today’s price – The cost of a funeral has doubled in the past 10 years. Prices at traditional funeral homes are already incredibly expensive. By prepaying at today’s prices, Australians can avoid increasing costs over the years.
• For flexible payment options – Bare prepaid funeral plans can be paid either upfront, or in instalments over two years. Our payment plans make the process of paying off a funeral more manageable, especially for pensioners.

3. How popular are prepaid funerals?

Prepaid cremations are growing in popularity, largely because they allow you to lock in the price of the service at today’s cost, irrespective of when it is actually required. As the cremation is fully paid, you can rest assured that your family won’t be financially burdened by the cost of the funeral, nor will they feel the pressure to arrange an extravagant and costly funeral service.

In Australia, the amount of direct cremations is growing rapidly, and prepaying is becoming increasingly common.

4. Is funeral insurance better than prepaid funerals?

If you currently have funeral insurance, whether it's best to keep paying your premiums or cancel the policy and purchase a prepaid funeral plan instead, depends on a few things. Take into account your funeral insurance policy: the lump sum payout, your age and how much you pay weekly/fortnightly/monthly.

Plus, you might end up spending more on the funeral insurance compared to the payout your family will receive when you pass away.

As a general rule, if you expect to live longer than 12 months, you are generally better off cancelling a funeral insurance policy and purchasing a prepaid funeral plan instead. On the other hand, if passing is expected within the next 12 months, you are probably better off continuing the funeral insurance payments and request your family to contact us at the time of passing.

You can also read more about funeral insurance here.

5. Do you guarantee the funeral if my plan isn't paid off when I die?

If you happen to pass away before your instalment plan has been paid in full, we will still go ahead with the funeral arrangement and paperwork process.

We will coordinate with your Next of Kin or family members to pay the balance due – at the price you locked in at the time you started the instalment payments.

6. How are you so affordable?

Bare is Australia's more affordable funeral service because we have a different business model from traditional funeral homes.

By offering simple packages that can be arranged online or over the phone, we don’t have the same high overheads. We don’t require expensive physical locations to provide a high-quality service. We have used technology to automate many manual processes, which allows us to pass on those savings to our customers.

7. Why prepaid funerals when I can wait to pay later?

Weighing up whether to purchase a prepaid funeral now, or leave the planning up to loved ones at the time of passing, depends on your current financial circumstances.

The major benefit of prepaying with Bare is that you lock in today’s price. Paying now avoids any increase in prices, which can be substantial over many years. It also allows for peace of mind that you won’t pass the stress and burden onto your family when the time comes. Paying later allows you to save money in the meantime, however you do run the risk that prices will increase.

You can read more about this in our article prepaid funerals vs just waiting until later.

8. Do I pay any extra fees when the time comes?

No, once you have locked in. your prepaid funeral you have guaranteed you will receive that funeral service. The only situation where extra fees may be payable is in the event you pass away in a different region from your address. There may be some additional transportation fees to ensure timely collection.

9. Why do states or regions vary in price?

We aim to offer an affordable funeral service in every region we operate in. The bulk of our costs are from the cremation fee and transportation. In some states (such as Tasmania and Western Australia) the cremation fee is significantly higher than in others.

Our prices reflect the local input prices of our services.

10. Why does your pricing page say saying 'starting at' – but my quote is different?

The prices we have on our pricing page are typically for major cities and surrounding suburbs. The slightly higher price for regional areas is primarily due to the increased transportation costs, crematorium fees and state government charges. However, even in regions where our prices are higher than our other service areas, we are typically more affordable than other funeral homes in the region and we are constantly working to bring our costs down (everywhere).

11. Why is the amount put in trust lower than the price I paid?

When you purchase a prepaid funeral, we are must legally remit GST immediately. That means we take out the GST component of the amount paid and send it to the Australian Tax Office.

We also take our trust setup fee to pay for the administration and setup of your money in trust with the Australian Friendly Society.

All of these costs are clearly outlined on your prepaid funeral contract. If you have any questions at all, please don’t hesitate to call or email us anytime. We pride ourselves on complete transparency.

12. Do your prepaid funerals come with hidden fees?

At Bare, our prices are fully inclusive, with no hidden fees ever. Once the prepaid funeral plan is paid off, there is nothing left to pay - whether the service is needed in two months or 20 years.

A major reason why we started Bare was to offer an affordable and completely transparent funeral service. We are completely open about our pricing, which differentiates us from the traditional funeral industry.

13. Do prepaid funeral plans have an itemised breakdown?

If you have a prepaid funeral contract with Bare, it will include an itemised cost breakdown of all the services included.

You can request a copy of this anytime, or generate your own on the Bare website here.

14. How do I let my Next of Kin know?

It’s important to ensure that your Next of Kin or the executor of your Will is aware of your funeral wishes, especially if you have a prepaid funeral plan. That will make the process seamless at the time of your passing.

If you are in an aged care facility or hospital, let them know that you have a prepaid funeral contract with Bare and provide our 24-hour phone number - 1800 071 176. That way, they can contact us immediately when the time comes.

15. What legal documents will I receive?

As part of a prepaid funeral arrangement, you will receive a funeral contract, which lists all the prearranged services agreed upon. You will also receive a copy of your Australian Friendly Society Disclosure Document outlining how your money is kept safe.

16. Can I receive a hard copy of my paperwork?

Yes. You can request a hard copy of your prepaid funeral contract and disclosure document in the mail, for safekeeping.

Your documents are also securely stored online, with your Bare login. These can be shared with family, executors, lawyers and accountants at any time.

17. What if I change my mind about prepaid funerals?

You have a 30-day period to consider your contract and change your mind, if you wish. You may cancel your prepaid funeral contract within the 30 days by notifying Bare in writing. Your contract will then be cancelled and you will receive a full refund.

18. What if I die away from home?

If you are travelling within Australia when death occurs, your family will need to contact us immediately, so that we can make the necessary arrangements to assist with your safe transfer. Some additional costs for transport may be required.

If you have any questions about prepaid funeral plans or to get a quote, call our helpful team on 1800 202 901 or click the link below.