Plan Ahead: The Concept of Funeral Bonds
A Funeral Bond is a specialized investment for your future funeral expenses. A life insurance company or a friendly society will allow you to keep aside money for this specific time. It is similar to a trust account, which accumulates bonuses and becomes payable at the time of demise. The benefits can only be used for funeral expenses.
Some of the features of funeral bonds are –
- Money Should be held in an independently managed funeral fund.
- The interest must re-invested into the capital.
- The funds can be accessed only after the demise and can be used just for funeral expenses.
- The funeral bond is not an assessable asset if you have assigned the fund to a funeral director for a fully prepaid funeral service and have a contract.
- You can contribute either by lump sum or monthly payments till you reach the selected value of the bond.
Some of the benefits of Funeral Bonds are –
- You can start with small amounts and then make regular payments to suit your budget and circumstances.
- This will save your family from distress in the future at an emotional time. You can also nominate a funeral service company and direct payments directly to them.
- A funeral bond will relieve your family from the financial burden.
- This will ensure your exact wishes are known.
Incase funeral costs are more or less than the investment, the company can issue an account or a refund for the balance. Another important thing to remember is that you may not be entitled to a refund if you decide to discontinue the bond.