*These days there seems to be nothing more morbid than the death industry.
Whether it’s those pesky TV ads for funeral insurance, the questionable practices of the few companies that control the funeral industry, or the sheer hide of utility and telcos in charging grieving relatives to have a deceased relatives name removed from a household bill, it all seems geared at taking advantage of worried or fragile people.
Woody Allen’s character in the 1975 movie Love and Death has a sanguine approach to the end of our days. “The key here, I think, is to not think of death as an end, but think of it more as a very effective way of cutting down on your expenses.” And so indeed it should. However today’s world prepares us for death with a completely different philosophy. Perhaps Benjamin Franklin’s age old saying, “that in this world nothing can be said to be certain, except death and taxes”, should be reconfigured to include the additional certainty of “ridiculous death expenses”.
Today’s Funeral Industry
Gone are the days where local ‘mum and dad’ funeral businesses could be relied on in the event of the passing of a loved one. These days, the funeral industry in Australia is dominated by just a few big players that own the lion’s share of most of the recognisable names in the funeral biz. The industry in Australia is dominated by one listed company, InvoCare. You may not know of Invocare, but you will certainly have heard of its brand names like Gregory & Carr Funerals, Boland Funerals, White Lady Funerals, Metro Funerals and Simplicity Funerals. Invocare reportedly controls up to 80% of the funeral market on the east coast of Australia. InvoCare’s former chief executive officer Andrew Smith described pricing in the industry as “inelastic” – because only 15% of us are inclined to shop around when someone dies.
In a 2017 article on the funeral industry in 2017 on the website The Conversation, two factors contributed to difference in the overall price of a funeral- whether the funeral was provided by one of the brands owned by the large listed corporation and whether the operator had prices online. The finding was clear that if an operator did advertise prices online, consumers were likely to save somewhere between $1000 and $1500 for the same product. However, the problem is that most well-known funeral brands and consequently most of the market in Australia, didn’t provide prices online.
The ‘basic funeral’ is regulated in NSW and Victoria which in essence means that funeral providers have to offer this product and give a breakdown to interested consumers of each item provided in the service.
For example, in Victoria the legislation (Funerals Act 2006) states that: A funeral goods and services price list— (a) must include a description and total price of the funeral goods and funeral services offered by the funeral provider; and (b) must include a list of any service fees that may be charged by the funeral provider; and (c) must reflect the maximum price that a funeral provider charges for the funeral goods and funeral services; and (d) in relation to the basic funeral service offered by the funeral provider, must contain— (i) a description of what is included in that service; and (ii) the total price of that service. (3) A funeral goods and services price list must either— (a) contain the full range, description and price of all coffins available for purchase; or (b) include a price range for the coffins available for purchase and advise that a coffin price list is available. Unfortunately, such basic prices never include the expensive and emotional inclusions like flowers, limo cars and death advertisements.
Whether you’re an executor organising the funeral, or a family member, set yourself a budget for these items. For those who wish to move beyond the ‘basic’ packages, the emotive decision that often comes with the picking of a coffin can be fatal for the hip pocket, with reports of big mark-ups on a wholesale price of a coffins and caskets between 300% and 500%.
Consumers wishing to avoid these costs may wish to take note of the fact that under the Australian State Burial and Cremation Acts & Regulations, there is no legal reason prohibiting the use of cardboard coffins (or caskets) for funerals, whether burials or cremations, anywhere in Australia except of course that they must be sturdy enough to contain the body. One company in Australia, with the apt name “Leaving Lightly”, actually specialises in making these types of coffins. Why not buy one in advance, leaving instructions with your executor for it to be used at your funeral.
At the end of the day, funeral companies are providing just another service, and as such the Australian Consumer Law and the rules relating to fair trading in this country apply to funeral services and products. This allows you an avenue of recourse when things go pear shaped. A great example of this is the code of conduct established by the Office of Fair Trading in cooperation with the Queensland funeral industry. The Code provides a guiding principle of ethical and responsible behaviour which recognises the importance of clients’ wellbeing with a focus on minimising the potential harm that can arise from using an unscrupulous provider. Complaints of problems can be made directly to the Office of Fair Trading. And this avenue could also be used Australia wide, even when no code exists.
Arranging a funeral shouldn’t be a death defying maze of confusion and emotional persausion/blackmail. Whether you’re planning ahead for your own funeral or you’re an executor or next of kin, set a budget, shop around and look for transparency when it comes to prices.
Finally, if you’re looking at taking funeral insurance think about the two following things when it comes to finding the very best insurance provider:
Consider their reputation
It is no secret that much of an insurance companies success is built on the reputation that is built from their past clients. Applicants should take the time to read up on the company and the experience that other people have had with them in the past. Consumer forums and review websites can also be handy here.
Am I Going to End Up Paying More in the Long Run?
It is crucial that all applicants assess what they are actually going to end up paying in premium payments over the life of their policy. Some policies will only require the policyholder to pay premium payments until they have reached the sum-insured, ensuring no more is paid then the insured would have paid in the first place.
It is of utmost importance to determine how much you could potentially end up paying over the life of the policy and if possible find a policy that will cap premium payments once they have reached the sum-insured.