3 ways to make sure you don’t overpay for a funeral service

They say timing is everything. As I grow older, I begin to appreciate just how true this phrase is. The timing of a decision, an action or a chance meeting can change the course of your life in an instant.

This happened to me early last year during a conversation with my friend Sam. As we caught up on an array of topics, Sam mentioned his family member has passed away recently. I asked about his experience, to which he responded: “I found the ceremony to be pretty underwhelming, to be honest, mate. It didn’t really fit Grandad and it was bloody expensive”.

I felt deflated for him. “Sorry to hear that. Out of interest – how much was it?” His response: “Over $12,000″.

I was taken aback. I asked him more about the arrangement process, and we spoke of the stress on the family. It sounded terrible.

The idea that a service could be so expensive and so underwhelming really bugged us. With technology changing the way we travel, shop and even work, surely there were affordable options available for a funeral? We wanted to make sure Sam’s experience wasn’t unique, so we spoke to family and friends about their own experience in arranging a funeral.

Without fail, they all highlighted the same points: we didn’t know what to do, and it was difficult to find information, the service didn’t truly reflect the person, and it was expensive. Over and over. The same story. Overpriced, cookie cutter, stressful.

We dug deeper. Just how expensive was it? We researched the average price of a funeral in major Australian cities and were surprised with the high costs.

Consistently over $7,000, often for just a basic funeral service. If you wanted interment or a burial plot, the price was well north of $10,000. Want venue hire and catering? It could easily be $30,000 or more. That’s more than an Australian receives annually on the Age Pension!

Genuinely shocked, I started researching what made funerals so expensive. I found the answer in a 2017 research report by Sandra Lee Van der Laan from the University of Wollongong:

• 31 per cent of a funeral cost is the coffin (often marked up by more than 1,000 per cent)
• 39 per cent of the cost is the ‘professional service’ fee.

Why do funeral homes do this? It’s partly due to their business model and partly because they can. Their business model hasn’t evolved to today’s customer. They still rely on brick and mortar venues and serving families that aren’t well informed about their options. This translates to inflated fees and high mark-ups.

From a timing perspective – the funeral industry hasn’t fundamentally changed in over 100 years. Times have changed, yet it remains the same. It hasn’t adapted to today’s customer – well informed, price conscious and non-traditional.

We started Bare Cremation to bring the funeral industry into the digital age and serve today’s customers. Our mission is to provide all Australians with an affordable, easy to arrange funeral service option. Personally, I’m particularly passionate about ensuring every Australian has access to an affordable, memorable and dignified end of life.

One part of this journey is to educate and ensure that people know their end of life options. So let’s get started! Here are three of the most valuable pieces of advice for saving money when prepaying or arranging a funeral.

1. Separate the arrangement from the memorial

Doing this will give you choice and reduce your costs. Of all my conversations with family and friends about funerals, no one mentioned how great the coffin was or how good the sandwiches were at the memorial. On the contrary, most wanted something simple, like a barbecue in the backyard, a private scattering ceremony, or a meal with the family at a favourite restaurant.

The majority of funeral homes bundle the cremation or burial in with the memorial service. This increases the service cost exponentially. To avoid these high costs, I recommend separating the cremation or burial from the memorial.

All funeral homes offer a non-attendance (also known as direct) cremation or burial. These services include all of the arrangement of the basic requirements – paperwork, collection, cremation etc. and are generally cost effective. Pay for that service only, then save your money for a fitting, more personalised memorial later.

2. Ask for itemised quotes

Regardless of your choice of funeral, whether planning for yourself or others, ensure you ask for a quote with each specific line item and its price. This will enable you to determine how much you are paying as a service fee and other extras versus necessities such as government fees, legal paperwork and transportation.

If a provider is reluctant to hand over those details – take your money and run. It’s a good indication they are inflating their service fees, or charging high mark-ups on their products (i.e. coffins).

3. Don’t buy funeral insurance.

The funeral insurance industry has come under fire recently – for very good reason. It offers a product that generally gets more expensive as you get older, doesn’t pay out if you stop paying your premiums and that caps your payout regardless of the amount you have paid in.

Please avoid wherever possible. Spend your money on a prepaid funeral or a funeral bond instead. You can find more information on the difference between funeral insurance, prepaid funerals and funeral bonds here.

There are many ways to save money and stress in arranging end of life affairs. I’m honoured to be able to contribute to Starts at 60 and look forward to sharing more in the months ahead.