The prepaid funeral plan helps one to plan before hand and pay in advance for their final funeral arrangements in the event of their death.
The money can be taken later as an insurance policy, or if held as a trust it can be refunded when needed.
The Association for the Advancement of Retired Persons conducted a survey on the prepaid funeral plan. According to the survey, the popularity of the prepaid funeral plan has increased in the recent years due to the rising costs of funerals and burials. Further, the increase in the number of deaths registered every day has made things more complicated for funeral directors in Melbourne. It was found that 30% of people over the age of 50 have made some prearrangement for their funeral or burial.
A prepaid funeral arrangement contract made directly with a funeral home or through a life insurance policy does not attract any regulation from the government. A bespoke contract that involves a third party will require government regulation.
The importance of prepaid funeral arrangements includes:
• All the funeral details will be taken of and paid for, one does not have to stress him/herself about the arrangements.
• The loved ones left behind will have the time to grieve without the added stress of arranging the funeral.
• One gets to control everything about their funeral as they have paid in advance for everything.
• Protects your family’s savings from having to sell their assets to cater for the arrangements as they have already been paid for.
• When the time occurs, you are guaranteed the services purchased or an alternative of the same if the original is not available.
• You will not need to pay more for more in the event that the cost of products and services increases as they are always locked in.
• You have the right to a refund or transfer to another funeral home if you can no longer use the services if you have moved away from the area.
Paying for your funeral beforehand has its advantages, however it does have some disadvantages.
• If you decide to cancel the plan, you may not be eligible for a refund if the contract includes a trust fund or insurance funding.
• You must carefully read the contract regarding the transfer of the plan. It may not apply to a transfer made to another funeral home outside of your district unless it states otherwise. After transferring the plan, the funding options may also differ.
• The funeral home can claim non-inclusion of some of the services if, at the time of signing the contract, the list of items is not given to you.
• There is a slim chance of getting back your investment if the funeral home mentioned in the contract goes out of business.
• In conclusion, the prepaid funeral plan is a stress-free investment, it is, therefore, a good idea to contact the Australian Funeral Directors Association. Most importantly read completely and carefully the contract before signing and agreeing to it.