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Stephen Baggs Funeral Directors
Funeral Insurance Lastly, I must make mention of the various funeral insurance products that have flooded the funeral investment market in recent years. While over the short term they may be a viable choice or ‘safety net’ for some people, the down side of this type of investment is best summed up by a recent question and answer from the Melbourne Herald Sun. I agree completely with Scott Pape’s assessment of this type of product and reproduce the information below in the hope it may prove useful for people weighing up their funeral investment choices. Herald-Sun: Saturday 1 March 2014 p. 39 Business section : The Barefoot Investor Scott Pape Question of the week Hi Scott, My wife sits at home all day and watches these blasted infomercials. We’ve got the wonder mop, the steam cleaner and every other bloody contraption that’s sold with steak knives. But wait! As they say, there’s more! After watching one of these shows she’s now signed us up for funeral insurance! Have I been ripped off again? Dennis. Hi Dennis, Yes you have. Funeral insurance is the financial equivalent of spray-on hair in a can. The biggest risk with funeral insurance is that you live a long, happy life. Here’s the thing: if you live for another 30 years, you’ll end up paying for your funeral 14 times over. Funerals cost between $6000 and $8000, and if you have a policy for 30 years you’ll pay $85,099 in premiums (according to a survey by actuaries Rice Warner). A better idea would be to (a) turnoff the telly so she can’t be emotionally manipulated by slick salespeople, and (b) create a monthly savings plan and invest the money into a good quality investment like AFIC [Australian Foundation Investment Company].
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