Prepay a funeral in New Zealand

Prepaying a funeral means setting money aside today so the cost (or part of it) is covered when you die, reducing the financial burden on your family. In NZ there are three legitimate models: a director-contract where you pay a specific funeral home today for specific services at today's prices; a trust-pool where you contribute funds to a trust (FDANZ Funeral Trust, Public Trust, or a director's own trustee scheme) that grows with interest; and funeral insurance where you pay a monthly premium for life and your beneficiary receives a lump sum.

It depends on the model and the level of service. A director-contract prepaid for a simple service might be NZ$5,000–$8,000; a fully customised director-contract for a traditional funeral with burial could be NZ$10,000–$20,000. A trust-pool plan can start with any amount (Legacy Funerals requires NZ$5,000 setup; The Funeral Trust accepts smaller contributions). Funeral insurance premiums vary by age and cover band — AA Life lists a verified example of $14.28/week for $10,000 cover at age 66.

Only in the director-contract model. If you contract a specific funeral director today for specific services, those services are locked at the contracted price — InvoCare NZ states verbatim that "once you pay the agreed cost of the funeral there is nothing more to pay." Trust-pool plans (FDANZ Funeral Trust, Public Trust) do NOT lock prices — your fund grows with interest, but if funeral costs rise faster, your family pays the gap. The Funeral Trust itself says "funeral estimates are not fixed and are subject to inflation."

Money set aside in a recognised prepaid funeral plan or trust, up to NZ$10,000, is excluded from Work and Income asset testing for the Residential Care Subsidy. For most older New Zealanders this is the single concrete financial reason to prepay — it shields up to NZ$10,000 of savings from the asset test.

It depends on where your money is held. Trust-pool plans hold funds outside the funeral director (Public Trust, FDANZ Funeral Trust, or BNZ trustee accounts). The director failing does not affect your funds. Director-contract plans rely on the director still operating at the time of death — though some director-contract schemes (Lamb & Hayward Funeral Trustee Limited, Legacy Prepaid Funerals Ltd) ring-fence funds in BNZ accounts. Always ask which structure your prepayment uses.

Trust-pool plans (Public Trust, FDANZ Funeral Trust) generally allow withdrawal of the principal (minus admin and any tax). Director-contract plans vary — some are refundable, some only transferable, some neither. Ask the provider in writing before committing. Funeral insurance premiums, once paid, are not refundable.

No. Funeral insurance is a different product. You pay a monthly premium for life; on death your beneficiary receives a lump sum (NZ$3,000–$30,000 typically). The lump sum is not earmarked for the funeral — your family decides how to use it. Total premiums paid can exceed the payout if you live a long time. Funeral insurance does NOT qualify for the NZ$10,000 RCS exemption.

For director-contract: InvoCare NZ brands (Lychgate, Gee & Hickton, Simplicity, Academy, Resthaven, Elliotts, Fountains, Beth Shan, White Lady) via funeralplanner.co.nz; Legacy Funerals (Tauranga); Lamb & Hayward (Christchurch); Hope & Sons (Dunedin). For trust-pool: The Funeral Trust (FDANZ) — most FDANZ-member directors route here; Public Trust Prepaid Funeral Trust; Funeral-Link / Prepaid Funerals NZ. For funeral insurance: NZ Seniors, OneChoice, AA Life, Chubb Life.