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Funeral plans exploit anxiety around high funeral costs: CHOICE

Families shocked by funeral industry practices.

Consumer advocate CHOICE has found that companies are taking advantage of the anxiety people feel around paying for funerals to push advance payment products – regardless of whether they're in the best interests of customers.

"The funeral-plan industry, which is worth billions of dollars, targets vulnerable people to make money," says CHOICE investigative journalist, Saimi Jeong. "These plans make an already vast network of funeral services even more confusing and complicated for many Australians." 

Key points: 

- Australians often take out funeral plans because they don't want to be a burden on their families after they die. 

- Many policyholders don't completely understand the funeral plan contracts they are signing, or the costs that they involve. 

CHOICE has even heard stories where funeral-plan policyholders have lost all of the money they paid in advance, resulting in their families having to pay full price for their funeral again.

"Australians don't always get the full benefits when it comes to prepaid plans," says Jeong. "People are paying for peace of mind, but their families often get a rude shock when the time comes to oversee the funeral and it's not as they expected."

Funeral plans are often more beneficial for funeral companies than for the people purchasing them.

"Invocare, for example, has 93,000 funerals in the pipeline," Jeong says. "The company's own modelling shows that its national market share would be as much as 22% lower without these prepaid funerals." 

Invocare also stands to make money from any funds that are leftover from a prepaid funeral. If there are surplus funds from your investment, they can't be used to pay for any additional parts of the funeral. Instead, they go straight back to the company.

Last year, Invocare made $800,000 in surplus funds. The company expects this number to increase every year, reaching at least $1 million in 2021. 

CHOICE calls for a market study to address deep competition and consumer issues in the funeral industry

CHOICE is calling for the consumer regulator, the ACCC, to conduct a market study into the funeral sector.

"Our investigation series into the funeral industry has uncovered deep issues with high fees, unscrupulous practices and potentially major competition issues." 

"The ACCC has used its market study powers to confirm harmful practices in the car, communications and loyalty scheme sectors. We think it's time the funeral industry faced the same scrutiny to make sure people aren't taken advantage of during an emotionally stressful moment of their lives," says Ms Jeong.

Media contact: 0430 172 669,

CHOICE's article is available at: