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 $13,250. 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 for any reason you change your mind and wish to cancel your funeral bond investment, provided Foresters are advised within the prescribed cooling off period, you will be entitled to a refund of all monies contributed (subject to any applicable local State laws).
You will need to return your funeral bond or Travel Care Plan membership certificate within 14 days from the date of issue (or as in such period as is designated in the pre-paid funeral contract).
If you wish to cancel your investment within this period, you should write directly to Foresters. Please note that legislation in some States or Territories provides for a processing fee to be paid to the funeral director if you have entered into a pre-paid funeral contract.
Who can make a claim upon my death?
In the event of your death, where your investment in the Fund is assigned to a funeral director or if you have entered into a contract to meet the cost of your pre-paid funeral the entire value of the investment will be paid to the funeral director.
Where your investment in the Fund is not assigned to a funeral director or if you have not entered into a pre-paid funeral contract then upon receipt of satisfactory documentation your investment is paid to your legal personal representative (usually your executor) 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 the investment has been assigned to a funeral director then the total amount will be remitted to the assignee. If the investment is not assigned and if there is an excess remaining after funeral expenses have been met then any excess will be paid to your estate.
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?
Yes. The Foresters Prepaid Travelcare Plan offers peace of mind for you and your family should you die whilst travelling within Australia.
Travel Care Plan premiums are currently $125 or $160 for Applicants under 75 and 84 respectively.
If you die within Australia the cost of transportation from the place of death to the funeral home of your chosen funeral director, up to a maximum of $3,000 is covered. Your chosen funeral director must operate from premises within 70km of your residential address.
PLEASE NOTE: this distance restriction may not apply for rural-based funeral directors.
Is there a maximum amount I can invest?
Where the investment is assigned to a funeral director you can invest any reasonable amount to cover your funeral expenses.
Where the Bond is unassigned either in single or joint names you can currently invest up to a maximum of $13,250*.
Additional contributions over $13,250* may be made (if applicable) to cover the Travelcare Plan 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:
- Direct debit from a bank account, or;
- Direct debit of Centrelink benefit entitlements.