Plan Ahead: The Concept of Funeral Bonds

October 5, 2020 0 Comments
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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 –

  1. Money Should be held in an independently managed funeral fund.
  2. The interest must re-invested into the capital.
  3. The funds can be accessed only after the demise and can be used just for funeral expenses.
  4. 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. 
  5. 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 –

  1. You can start with small amounts and then make regular payments to suit your budget and circumstances.
  2. 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.
  3. A funeral bond will relieve your family from the financial burden.
  4. 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.

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