Funeral Bonds Explained - Everything You Need to Know

Funerals can be quite expensive. Because of this, more people are starting to look at pre-planning funeral options. This ensures that your family isn’t faced with a financial burden when you pass away. This will allow you to put some money aside regularly, investing in a funeral bond. But what does this type of investment look like and how can you be sure that your money is safe? Here are the basic things you need to know about a funeral bond. 

Where Does Your Money Go?

A funeral bond is a type of investment product, where the funds will be held in your name. This is managed by a third party, separate from the funeral home you used to plan the funeral. The purpose of the fund is to ensure that your money keeps pace with inflation. This is the reason why you can lock in today’s prices when you start paying for a funeral, insulating you against future cost hikes.


Sometimes, you will have excess funds after paying for the ceremony. In this case, the leftover money will become part of the estate.

What If Your Funeral Bond Is Only Partially Funded?

Sometimes, you will pass away before completing your payment plan. The value of the funeral bond can be used to pay for the funeral. Your family will need to pay the balance.

How Do You Know Your Money Is Safe?

There are a few safety provisions that are built into funeral bonds. First, the money is only accessible by the account holder, which is the person who took out the funeral bond. This ensures that the cash can only be used to pay for your funeral.

Next, the money is stored with an independent third party. In the unlikely event that your funeral home goes out of business, your funeral bond will survive. Furthermore, you can change your funeral provider at any time.

Do Funeral Bonds Count As Assets?

The good news is that planning a funeral in Albury usually won’t have any impact on the government payments you receive. This is because the money you place into these funeral bonds isn’t considered an asset by the government. However, you will need to stay under a limit of $14,000. This maximum limit will change over time, depending on the level of inflation.

How Are Funeral Bonds Different From Funeral Insurance?

Both funeral bonds and funeral insurance are good ways to pay for a final farewell. But there are a few key distinctions between the two. First, funeral bonds will require you to pay a fixed amount each week. However, funeral insurance premiums will often increase over time, as your risk level grows.

Furthermore, you need to keep paying for funeral insurance each month. If you miss a payment or let the policy lapse, you might not be able to recover anything when you pass away. On the other hand, you’ll be able to keep every dollar that you place into a funeral bond.

Conclusion

Funeral bonds are one of the most popular pre-planning funeral options in Albury. They are a simple, yet effective, way to pay for your final farewell in advance. This will give you peace of mind, knowing your loved ones won’t be left with a financial burden when you pass away.

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