Financial planning

Funeral insurance versus pre-paid funerals: The difference could save you money!

Feb 03, 2022

Saying goodbye is never easy, but if there’s one thing we can do to help our loved ones during a difficult time, it’s to remove the cost of our funeral expenses from them. A little forward planning and preparation means you can celebrate your life in your own special way and leave your loved ones to focus on the experiences and memories that make up your story and giving them peace of mind that everything has been taken care of.

We mightn’t want to talk about the end of our lives, however being open and upfront about these things can help alleviate potential stress and financial strain on your family when the time comes. There are two common ways to fund a funeral in advance, one is taking out funeral insurance and the other is pre-paying for your funeral ahead of time, but how do they really stack up? Knowing the difference between the two will not only help you decide which option is best, but it may also save you thousands of dollars.

What do funerals cost?

According to estimates from the Australian Securities and Investments Commission (ASIC) Moneysmart website, the average price for a funeral can be between $6,000 and $15,000. You will generally need to factor in costs such as a funeral director, transport, a coffin, death certificate, relevant permits (in the event the burial is at a special location), and cremation. There will also be other expenses such as flowers, a celebrant and/or the wake.

Now you could start putting money into a savings account so that when the time comes there are funds available for your loved ones to pay for your funeral, but there are better options.

Traditionally funeral insurance would be the most common approach to prepare for life’s uncertainty, however increasingly Australians are exploring options around prepaying their funeral in advance.

Funeral insurance

Upfront, funeral insurance often seems like the better choice. After all, everyone understands what insurance is and the monthly cost is often quite low. Just like any other type of insurance policy, you pay a regular premium for a fixed amount until it needs to be claimed. That fixed amount is then paid to your beneficiaries – who are named in the insurance policy – when the time comes.

While there are some advantages to taking out funeral insurance, the reality is you could end up paying a lot more than the benefit your family will receive. The ongoing fortnight or monthly premiums can add up to much more than what a funeral actually costs.

Premiums also increase a lot over time due to inflation and once you turn 50. This can make it difficult to afford when you are living on reduced income. And if you miss a payment, your premium policy could be cancelled all together with no option for a refund meaning you are no longer covered and are left with nothing after all the money you’ve already spent.

Pre-paid funeral plans

A pre-paid funeral plan is when you purchase your funeral and organise the details in advance. One of the safest ways to pre-plan your funeral, and ensure your money is protected, is with the Australia-wide funeral planning service, Guardian Plan.

When you buy a pre-paid funeral plan, you sit down with a Funeral Arranger and map out the type of funeral you want. From the flowers to the music, you get to plan how your life is remembered and say goodbye on your terms. And unlike funeral insurance that may need you to do a medical test, pre-paid funeral plans don’t have such requirements.

When you pre-pay for your funeral in advance, you are paying for it at today’s prices – even if you don’t use it for years. It’s a smart investment and protects you from inflation and price increases. All the details are written into a contract, including the terms of payment. You can pay for your funeral in installments or upfront as a lump sum. And once the funeral has been paid in full, that’s it, there is no more to pay. Calculate the savings of your funeral when you visit the Guardian Plan website.

Under the plan, your investment is held by the Over Fifty Guardian Friendly Society, which is regulated by the Australian Prudential Regulation Authority (APRA) ensuring the funds are protected, regardless of what may happen to a funeral company. APRA protection provides you with the peace of mind you need to ensure your money is protected.

When it’s needed, your Guardian Plan can be used at one of 250 accredited funeral homes from around Australia. Regardless of where you are living and when you take out the plan, you have choices when it comes to planning the funeral you want, where you want and within your budget.


There’s comfort in knowing everything has been taken care of, no matter what. To find out more about pre-paid funeral plans contact one of Guardian Plan’s friendly consultants today or call 1800 220 888.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

Learn more about Guardian Plan prepaid funerals.

Your farewell, your way. Lock in today’s prices with no more to pay. Your funds are securely held in an independent APRA-regulated fund accepted at 250 accredited funeral homes. Save money on funeral insurance with Guardian Plan.

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