Please click on the sections below to expand answers to frequently asked questions regarding funeral bonds:
What are the responsibilities of the funeral fund manager?
Forester’s main responsibilities are to ensure that your payment is properly invested in accordance with the Funeral Fund Rules and appropriate State and Federal legislation in your name and that your funds are not released or accessed by any third party until the funeral service is provided.
How safe is my funeral bond investment?
Most importantly your funds are invested in a capital guaranteed funeral benefit fund. Being capital guaranteed means your investment can never be less than your initial contribution (less any funeral director establishment fee) plus any annual bonuses that have been applied. Funds held in the Foresters Funeral Fund may only be invested in a manner as specified in the Benefit Fund Rules and the Life Insurance Act 1995.
Foresters is also regulated by the Australian Prudential Regulation Authority (‘APRA’) to whom it must report on a quarterly basis. Prudential Standards issued by APRA prescribe that money held in the benefit funds of a Friendly Society may only be used for the benefit of its members. If the Society were to cease to trade for any reason, the investments in the Funeral Fund could not be used to pay outstanding debts, but would continue to be held for the benefit of you, the Fund member.
Does my investment enjoy annual bonuses?
Foresters Funeral Bond declares an annual bonus each year as of June 30.
The bonus is based on the investment earnings of the Fund, less income tax calculated at the corporate rate of 30%, management fees, fees and any other required transfers to statutory reserves.
The Appointed Actuary makes a recommendation as to the annual bonus, which is subject to approval by the board of directors of Foresters.
Once allocated, bonuses form part of your capital guaranteed investment and contributes to increased future bonuses.
Do I need to declare my investment as an asset for Centrelink and Social Security purposes?
Under current legislation your investment in the Fund may be exempt for the purposes of the assets test, income test and deeming provisions of both social security and veterans’ entitlements legislation.
To satisfy the requirements of these bodies your investment must be kept solely to contribute towards your funeral expenses and must be a reasonable estimate of the cost of the expenses.
Please note that under these provisions you will now be able to include the value of up to two funeral bonds provided the following criteria are met;
- You do not also have a prepaid funeral contract
- The amount invested in the Bond does not exceed the funeral bond allowable limit which at the time of writing was $13,500. This amount is indexed in line with CPI pension increases every 1 July.
If you assign ownership of your Bond to a funeral director in consideration of the purchase of a prepaid funeral, then there is no limit on the amount you may invest.
The cost of a funeral plot in a cemetery need not be included in the funeral cost that applies for pension exemption purposes.
Can I nominate a preferred funeral director?
Yes, you can nominate a preferred funeral director who you would like to perform the funeral service.
What happens to my investment if I move overseas?
In the event that you move overseas, your funeral bond investment will still remain in the fund in your name and at time of death will be paid to your estate to contribute towards your funeral expenses.
What if I change my mind and I want to cancel my funeral bond?
If you change your mind for any reason, simply provide written notice of your intention to cancel your application and return your Certificate of Membership of Foresters Financial within 30 days from the date of issue or such other period permitted by relevant legislation.
Who can make a claim upon my death?
In the event of your death, and dependant upon the beneficiary option you have selected, then upon receipt of satisfactory documentation your investment can be paid to either your legal personal representative (usually your executor) or the funeral bond Investor or your nominated funeral director to be applied towards your funeral expenses in such manner as considered appropriate.
What happens if there is more in the fund than my funeral costs?
If there is an excess remaining after funeral expenses have been met then any excess will be paid to your estate or in the case of the investor option to the Investor.
Can I take out a bond in joint names?
Yes. Where an investment is made in joint names, upon the death of the first of the joint investors, your investment will be distributed in full to pay for all or part of the funeral expenses of the joint investor.
Do you offer insurance to cover the cost of transporting my body if I die interstate?
Most pre-paid funeral contracts will cover transportation of the deceased within a pre-determined distance outside of which additional charges can be levied on the estate.
The Foresters Financial’s Away From Home Cover protects your loved ones from the associated transportation costs, back to your chosen funeral director, up to a maximum of $3,000, should you die whilst traveling within Australia, provided their premises are within 100km from your permanent residence.
We recommend you refer to the Foresters Financial Funeral Bond PDS as other qualifying and claim conditions do apply to the Away From Home Cover.
Is there a maximum amount I can invest?
Where the Bond is unassigned either in single or joint names or in the situation where you have nominated a preferred funeral director, you can currently invest up to a maximum of $13,500*.
Additional contributions over $13,500* may be made (if applicable) to cover the Away From Home Cover premium.
* This limit is indexed on July 1st each year.
Can I save towards the cost of my funeral?
Yes, through the Bond’s regular savings plan you can invest as little as $25 per month. These contributions can be made by:
- Cheque or
- Direct debit from your credit/debit card or from a bank account