Funeral Bonds are a special financial investment which can gain interest – the difference is that funds in funeral bonds can only be used to pay for funeral expenses. It is different from pre-paid and pre-arranged funerals as no aspects of the funeral have been selected and prices are not locked in. There is no guarantee that all costs will be covered.
A Funeral Bond is NOT like Funeral Insurance. If you stop making payments towards your Funeral Bond you will not lose your bond. Funeral Insurance requires monthly premiums, which can increase significantly after you turn 50 and many do not provide refunds if you miss a payment.
Funeral Bonds and Centrelink
Funeral Bonds do have some advantages and probably the most favourable is that they are exempt from Centrelink means testing. This allows you to reduce your assessable assets for the Services Australia means test and potentially may make you eligible for part or all of the aged care pension. We strongly recommend you seek professional financial advice to clarify your own situation and determine if this is the right choice for you.
There is a limit on how much can be invested for a Funeral Bond. The maximum amount is $13,500 for the 2021 - 2022 financial year. A couple can take out two separate funeral bonds and claim $27,000. However they can’t have these in joint names and claim the $27,000. If the bond is in joint names then the exemption limit drops to $13,500.
If you stop making payments at any point, any money you have contributed towards your bond remains in the bond and your family will NOT lose access to your funds. Another advantage of Funeral Bonds is that you can change funeral providers if you move to a different state, the bond is portable.
How Safe are Funeral Bonds?
All investments involve a degree of risk. The most secure choice you can make is the ‘Capital Guaranteed’ investment choice. We encourage you to discuss your options with H.Parsons. Our experienced team can guide through this process. *Foresters Financial manages all Funeral Bonds taken out with H.Parsons.
Who Can Take Out a Bond?
Bonds are largely personal. It is possible to invest in a bond with another person, typically a spouse or partner. When investing on the behalf of another person there may be technicalities to overcome. Please contact our team at H.Parsons to discuss this further.
People usually decide to take out their own Funeral Bonds and prepare for their own passing. This prepares their family and friends by removing the significant financial burden of arranging a funeral.
To make an appointment and discuss your pre-planning needs,
*All funeral bonds through H.Parsons are managed by Foresters Financial - an independent financial entity.
Foresters Financial are an Australian company with origins going back over 200 years. They are a registered company under the Life Insurance Act and specialise in funeral related finance.