Options when planning for funeral expenses?

A funeral is a major event, and as with all events it requires planning in advance. While there are many ways to fund a funeral, it requires thorough research to find out which method works for you. Here’s an overview of some of the most common ways to ensure there’s enough money for your funeral. 

Good old savings account

If you’re a disciplined saver and feel that time is on your side, opening a savings account and making regular contributions could be an option. Giving joint account access to a trusted family member or friend is recommended. 

A drawback with this approach is that you don’t know when you’ll need the money and whether you’ll have enough when the time comes. Bear in mind also that problems could arise when you go into rest-home care, as your funeral savings would be taken into account when Work and Income means tests your assets if you’re applying for a Residential Care Subsidy .

Pre-paid funeral plans 

A pre-paid funeral plan is when you make a plan with a funeral director, set a budget at today’s prices, and make regular or lump-sum payments into an account with the funeral home. You will pay for the cost of the funeral plus their fees. 

It’s important to note that Consumer NZ has warned these plans are not for everyone, stating they may not provide enough to cover the cost of a future funeral, and can often become a long-term financial commitment that’s difficult to get out of . 


If you’re heading towards retirement, one option is putting money aside for your funeral when you draw down your KiwiSaver. To withdraw all your savings in one go when you qualify for NZ Super, currently at age 65, you have to have been a KiwiSaver member for at least five years. Before earmarking part of your KiwiSaver for your funeral, get expert advice on your retirement finances to make sure you would still have enough to live on. 

Funeral grant 

A Work and Income Funeral Grant can help with basic funeral costs for people who meet certain criteria. You may get a Funeral Grant if you’re the partner, spouse, child, parent or guardian of the person who died, or arranging the funeral of someone with no partner, spouse or direct relation.

The Funeral Grant is income and asset tested, and the most that can be paid is around $2,000. The amount depends on the money or assets of the person who died.

The Funeral Grant can be used towards professional services such as embalming, a casket, newspaper-notice costs, hearse fees, burial plot fees and cremation fees. In short – the barest essentials, if you qualify, and it is unlikely to cover all costs. 

Funeral costs can also be covered by ACC if you have an accident that causes death and is covered by ACC , or Veterans’ Affairs if you have served in the armed forces and meet their criteria. 

Funeral insurance

Funeral insurance is a relatively simple insurance product that pays a set amount when you die to cover your funeral costs. 

People often compare funeral insurance with life insurance. Unlike life insurance, however, there are no health questionnaires when you apply for funeral insurance. 

Read how much funerals cost in New Zealand.

It’s always a good idea to seek professional advice on all money matters, including your plan for covering end-of-life costs. If you’re ready to take a step towards making life easier for your loved ones when the time comes, talk to New Zealand Seniors on  0800 400 240 0800 400 240 or request a free information pack on funeral insurance.