Costs involved in a funeral

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Service fees, chapel fees, a casket or urn, burial plot and flowers: whether you choose to be buried or cremated, the costs of a funeral can be quite substantial and financially burden the loved ones you leave behind.

Research conducted by the Australian Securities and Investment Commission (ASIC) in 2012 shows that many people are not aware of the overall cost of funerals. Also, ASIC found some consumers have difficulties finding clear information about the different options to cover funeral costs, and are likely to "settle with the first product they find in trying to avoid being a burden on others"i. This overview will help you make an informed, rational decision about how to cover expenses that are involved with the costs of a funeral.

Life insurance with built-in funeral leaves your loved ones with resources for the future.

What costs to expect from a funeral

Funeral costs can vary greatly, depending on the cemetery, the funeral director, and the amount you want to spend on flowers and other extrasii. Cremation fees, costs of a cremation certificate and a permit can add up to $700iii, while burials are usually more expensive, starting at $4,500. This estimate doesn't include a coffin or costs of a funeral plotiv.

The burial plot makes up a significant part of the expense: in urban areas with limited cemetery space, a single grave plus opening fee alone can add up to about $6,500iv.You also need to consider the labour costs of opening and closing the grave, as well as service, chapel and other fees that are involved in a funeral. The cost of a coffin or casket can be anything between $800 and $10,000v.

How to pay for your funeral

Options to pay for your funeral include pre-paying with a lump sum (or a payment plan)vi, investing money in funeral bonds, funeral insurance or an advance from your life insuranceii, iv, vi.

Service fees, chapel fees, a casket or urn, burial plot and flowers: funerals can be costly.

When you take out funeral insurance, you make ongoing payments for a payout at claim that usually ranges between $5,000 to $15,000, depending on the insurance companyii. This lump sum will be paid to your beneficiary when you die. Funeral insurance may seem like an obvious choice to help fund your funeral, but what most people don’t know is that funeral insurance may not offer value for moneyv.

Life insurance with built-in funeral cover on the other hand provides comprehensive benefits, allowing you to use an advance payment of up to $15,000 for funeral costs while your claim is being assessed. Life insurance will also leave your loved ones with resources for the future. You may be surprised at just how affordable life cover can be. With $100,000 Life cover from Allianz, a 40-year-old could pay as little as $2.93 a weekvii.

Sorting out how to pay for your funeral can give you peace of mind. However, it's important to consider what solution will offer you the best value for money. Contact Allianz today to find out more about the Allianz Life Plan. Cover options available include Life cover, Critical Illness cover and Permanently Unable to Work cover.

To get more information on how consumers decide to meet the costs of a funeral, view the full ASIC Report.

i Australian Securities and Investment Commission (ASIC) 2012, How will you pay for your funeral?, viewed 24 October 2013,

ii MoneySmart 2013, Paying for your funeral, Australian Securities and Investments Commission (ASIC), viewed 22 October 2013,

iii Choice 2013, Funeral costs, viewed 14 November 2013,

iv State Library New South Wales 2011, Funeral costs, Library Council of New South Wales, viewed 22 October 2013,

v Choice 2013, Funeral insurance, viewed 24 October 2013,

vi Australian Funeral Directors Association 2011, What you need to know about pre-paid funerals, pre-arranged funerals, funeral bonds, funeral insurance, viewed 23 October 2013,

vii Premium based on 40 y/o male non-smoker $100,000 Life cover