Some people believe that they can only contribute to a funeral bond with a lump sum. However, members of most funeral bonds can use them as a saving plan. With Sureplan Gold, for instance, the minimum ad-hoc or regular contribution is $50. Gold members have the choice as to how much they wish to contribute, and if contributing by regular contributions, for how long. Should members have stopped making contributions, they can recommence contributions at any time.
A funeral bond is an accumulation fund, and the funeral benefit payable is the total of a member’s contribution/s and any bonuses (returns) credited. A bonus can be paid annually from the earnings of the fund.
Once the 30-day cooling off period has expired you cannot make withdrawals from a funeral bond, as the proceeds must be put towards your funeral expenses.
A funeral bond is treated as an Exempt Asset for pension purposes by Centrelink and the Department of Veterans’ Affairs, providing no more than two funeral bonds are held, and subject to a maximum contribution limit (currently $13,500. If you are an asset tested pensioner, and can take full advantage of the $13,500 limit, your fortnightly pension can increase by $40.50 or $1,053 per annum. This equates to a “return” of 7.8% p.a.