The cost of a funeral in New Zealand
How much does a funeral typically cost?
The cost of a funeral (or tangihanga) in New Zealand can be around NZ$10,000, or even more. The actual cost of a funeral will depend on factors like:
- Are you being buried or are you having a cremation? Cremation is usually cheaper than burial.
- Is your ceremony going to have require a large venue? The larger the more expensive, generally.
- Are there any special cultural or religious requirements? Customisation can increase the cost.
What's in this guide?
- How do I calculate the cost of my funeral?
- How can I cover the cost of a funeral?
- What happens if I can’t pay for my funeral?
- Tips for reducing the cost of my funeral
- Special types of funeral and costs
- Is funeral insurance enough to cover the cost of my funeral?
- How much does funeral insurance cost?
- Is funeral insurance a rip-off?
As the funeral industry has grown it’s become apparent that funerals in New Zealand are often sold as “package deals”, with options ranging from the basic to the deluxe. The costs can be broken up into the three main types.
- Professional services fees
- Additional service costs
- Third party expenses
Covering the cost of a funeral
You can use the following methods to easily cover your funeral expenses:
- Saving for a funeral. One way is to open a high-interest savings account and contribute a small amount on a regular basis. If you tell a close friend or loved one about the account, the money for your funeral will be there when it’s needed.
- Pre-paid funeral plan. You can arrange this with your local funeral director. You will need to pay a little each month until your funeral is covered. This will also allow you to make your preferred arrangements, so you’ll have the funeral you want when you die.
- Funeral trust. These are run through the Public Trust. You can open your prepaid funeral trust with as little as $500 or more if you’d like. You, or anyone else, can add lump sums or make regular contributions at any time. The money is invested and earns interest.
- Funeral insurance. This involves taking out a policy and paying regular premiums to maintain your cover. While some policies could cost you more than the cost of a funeral over time, if you look for an insurer who offers capped premiums and a pay-out guarantee, you will only pay the amount you want. Capped premiums mean that once you reach your chosen benefit amount, cover continues without the need for further payments. A pay-out guarantee ensures your dependants receive either the total premiums paid or the original sum insured, whichever is higher.
A funeral can cost anywhere from NZD$8,000 to NZD$15,000 – or even more – and if you die unexpectedly without some means of paying for your own funeral, your dependants or relatives will be left with the cost. Your family will need to pay this money upfront, leaving your loved ones with an immediate bill of thousands of dollars.
What happens if my relatives can’t afford to pay for it either?
If your relatives are unable to pay for your funeral, there are several options available. Work and Income provides means-tested financial assistance which covers some of the essential costs of a funeral. ACC provides financial assistance for a funeral if the death is the result of a workplace accident or illness, or medical treatment. For veterans, Veterans’ Affairs provides a funeral grant. The family of a murder or manslaughter victim can receive a grant of up to $10,000 for funeral costs.
In cases of financial hardship, families can apply to the local council to have the burial or cremation fees waived or discounted. The funeral director may also apply on behalf of the family.
- Avoid peak times. Weekends can incur additional costs.
- Avoid excessive amounts of flowers. Small arrangements can also do the trick.
- Only include necessary information in the death notices. Death notices are often charged on the number of words.
- Get quotes from various funeral providers. This can be from funeral directors or cemeteries.
- Consider a “wake”. This can help save money in comparison to a caterer.
- Get your quote itemised. Break down each expense so you know exactly what’s being paid for.
- Prepaid discount. Speak to your funeral director to see if they offer a discount for settling your account early.
Not all funerals are the same. We live in a highly multicultural society and funerals catering for a variety of cultures and religions are now commonplace in New Zealand. These can include:
- Catholic services
- Anglican services
- Buddhist services
- Eastern Orthodox
- Hindu services
- Jewish services
- Muslim services
- Natural burials
All of which have different requirements that can add to the cost of a funeral. An example is a traditional Chinese funeral which can take place over several consecutive days, adding significantly to the overall cost.
About funeral insurance
Funeral insurance will cover the cost of most funerals, providing a lump sum pay out of up to $30,000. Depending on the type of funeral you want, you may not require as much as this. In those cases you would choose a lower benefit amount equivalent to your estimated funeral costs (bearing in mind that prices will increase over time due to inflation).
The cost of your funeral insurance premiums will be determined by a number of factors including the amount of cover you opt for, your age, your gender, your smoking status and where you live. As a rough guide, the average premium in New Zealand is approximately:
|Age range||Cost estimates per annum|
|50 – 55 year olds||$200 – $300|
|60 – 65 year olds||$500 – $600|
|80 – 85 year olds||$1000 – $1,200|
One of the biggest criticisms levelled at funeral insurance in recent years is the fact that some people have ended up paying far more in premiums over the years than their actual funeral cost. This is quite possible, particularly with stepped premiums, which increase as you get older.
How do I make sure this never happens?
The insurance industry has responded to this by introducing a variety of measures designed to make funeral insurance more relevant and affordable. Many insurers now offer:
- Capped premiums. Once the amount you’ve paid in premiums equals the sum insured, your cover continues without the need to pay any further premiums.
- Pay-out guarantee. When you make a claim, you’ll receive the sum insured or the amount you’ve paid in premiums, whichever is greater.
- Value promise. Your premiums will never increase over time and may actually decrease, due to loyalty discounts every few years.
Ask an Expert