Louise and Glen, a married couple who have been retired for several years, began contemplating their mortality after Louise’s mother passed away and their friends underwent cancer treatments.
When Louise’s mother died, Louise was responsible for organising the funeral arrangements. The absence of prior arrangements and allocated funds made the experience highly stressful, as she struggled to balance affordability with her mother’s preferences. Determined to spare their children (and each other) from similar stress, Louise and Glen sought a solution.
Being mindful of their partial pension, Louise wanted to ensure that securing a Funeral Bond would not impact their pension benefits. For them, it was crucial to set aside money specifically for their funerals, ensuring easy access when the time came. They saw the Funeral Bond as a secure way to prepare for funeral expenses and guarantee that the funds would be used as intended.
"The Funeral Bond positively impacts our pension and provides easy access to funds when needed. We’re relieved to know everything is taken care of, and don't have to worry about burdening our children."
Louise and Glen considered a joint Funeral Bond, which would release funds to the surviving spouse for funeral expenses. However, they decided to each take out an individual bond. This approach ensured that both Louise and Glen were each insured for life, avoiding the financial burden on the surviving partner to start a new Funeral Bond.
They deposited $10,000 into each Funeral Bond and planned to contribute an additional $75 monthly to each bond until they reached the allowable limit of $15,000 (as of July 1, 2023). This limit meant that the bonds did not count toward the assets test for their pension payments. The Funeral Bond was also tax-effective, as the tax was paid within the investment, and any earnings would not count toward their income.
By placing a lump sum into the Funeral Bond, Louise and Glen reduced their joint assets, which increased their eligibility for a larger part pension. They chose the Balanced investment option, aiming to keep up with the cost of living increases.
The Funeral Bond allowed easy access to funds when needed, without waiting for the Estate to be settled. Louise and Glen felt a sense of relief knowing that they had allocated funds for their funeral expenses. They were pleased that their family would not have to worry about funeral costs and that having the bond positively impacted their pension.
An investment in protection and peace of mind
A Funeral Bond can provide incredible peace of mind for you and your loved ones by having funds set aside and readily available to pay for funeral arrangements.
By design, the amount is only paid when the insured person dies, guaranteeing the funds can only be released ready for funeral expenses.
The added benefit is up to $15,000 (current allowable limit set by the Government as of July 2023), that can be exempt from Centrelink Asset assessments and could support a strategy to optimise entitlements.
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