How to compare prepaid funeral plans in New Zealand

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-20 · Reviewed quarterly, when the underlying data is restated.

Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.

There is no single best prepaid funeral plan in New Zealand. Here is how the options differ on who holds the money, fees, access, price protection, surplus, portability and the effect on Work and Income tests, as at 20 October 2026. We name no winner, because the right plan depends on your funeral home, your health and what else you own.

A prepaid funeral plan is an arrangement where you pay money in advance, held for one purpose, your funeral. In New Zealand the money is usually held in a trust rather than by the funeral director, and the plan pays the funeral account when you die. It is not insurance: you pay in your own money, so there is no early-death window and no death benefit; what is available is what you paid in plus any return the provider's terms allow. FDANZ found 74% of deaths in 2025 had no pre-arrangement or pre-payment, and says $10,000, the most common deposit in its own trust, is now "well below" the cost of a modest attended funeral (FDANZ 2026 Industry Trends Report). The plan details below come from the providers' own pages and Consumer NZ, read on 20 October 2026. Terms change, so check the current documents.

The criteria that matter

Who holds the money. A trust separate from the funeral director, or the funeral home itself.
Fees. One-off, ongoing or none, and whether they can change.
Access. Whether you can take your money out, and when.
Price protection. Whether the plan promises to cover the funeral whatever it costs, and who pays a shortfall.
Surplus. Where leftover money goes.
Portability. Whether another funeral director, or a director in another region, can use the funds.
Failure. What happens to your money if the funeral home closes.
Means-test effects. What the money does to the residential care subsidy and the Funeral Grant.

None of these is scored, and we do not add them up.

How the main arrangements answer them

	Now For Them / The Funeral Trust (FDANZ)	Public Trust Prepaid Funeral Trust	A funeral home's own arrangement
Run by	The Funeral Trust Services Limited, a charitable company set up by The Charitable Funeral Trust, which FDANZ created	Public Trust	The funeral home
Fees	"No fees", with a promise to say if that changes	One set-up fee and one end fee, no ongoing management fees; amounts not shown on the page; a discount if you have a Public Trust Will and Enduring Powers of Attorney	Check the terms
Interest	Now For Them says "no interest or return is paid"; the FAQ says funds "may earn interest"	Not stated on the page we read	Check the terms
Minimum	$200 first payment; then $20 a fortnight by automatic payment or $500 per other instalment (FAQ)	Not stated	Check the terms
Access to your money	Generally not before death; exceptions for permanent emigration or extreme financial hardship at the trustee's sole discretion; full refund if you cancel within 21 days	Not stated	Check the terms
Price protection	The FAQ says there is no guarantee against price increases and that costs are not inflation-proofed	Not stated	Check the terms
Shortfall	Your funeral director arranges the balance with your family or estate	Not stated	Check the terms
Surplus	Leftover money returns to your estate (FAQ)	Not stated	Check the terms
Choice of funeral director	Another director can use the funds; an executor can apply to the trustee where the firm is not an FDANZ member	Public Trust is not itself a funeral director; Consumer NZ says trustee-company money is not tied to one provider	Often tied to one firm
If the funeral home closes	The FAQ says funds are held by the separate trust, not by the director or its bank	Not stated	Ask in writing
Residential care subsidy	First $10,000 excluded under current MSD policy	Contributions up to $10,000 "currently exempt"	Only if it is a recognised funeral plan

Sources: Now For Them, The Funeral Trust FAQ, Public Trust and Consumer NZ (updated 22 May 2024). Consumer NZ says most FDANZ-member funeral homes use The Funeral Trust, and other homes "may have their own trust arrangements and different terms and conditions". The two FDANZ-linked pages disagree on interest, and FDANZ announced on 4 March 2025 that the trust would restructure into a new plan, with all customers notified by November 2025 and balances staying in the plan (FDANZ: Future changes to The Funeral Trust). Treat the FAQ figures as the last published, not necessarily current.

Public Trust's page describes its fund as "under a government guarantee which means your savings will be fully secure". That is Public Trust's own statement, and we have not seen the guarantee's terms, so we do not repeat it as a fact about protection. We also found no source that says whether funeral trusts are regulated by the Financial Markets Authority or what protects customers if a provider fails beyond the trust structure; ask each provider. Our provider failure guide and the page on Public Trust's plan go deeper.

Reading the table

Price protection is the point to test. A fixed sum paid in today may not match the cost of a funeral years later. The Funeral Trust's FAQ says costs are not inflation-proofed, and that any shortfall is arranged with the family or estate. Ask any provider whether it promises to cover a stated list of services whatever they cost or only contributes the amount paid in. If a funeral director offers a fixed-price package, get the list of included items and disbursements, such as cremation or burial fees, in writing.

Access is the trade-off. Consumer NZ warns that you "may not be able to withdraw" money from a trust unless you are in significant financial hardship. That is the plan's strength, because the money is hard to spend elsewhere, and its weakness if your circumstances change.

Means tests cut both ways. Work and Income does not count prepaid funeral expenses of up to $10,000 each, held in a recognised funeral plan, when it assesses the residential care subsidy; for a single person aged 65 or over, the asset limit is $300,811 (Work and Income, updated 4 August 2026). FDANZ says the $10,000 level dates from 1994. But a prepaid funeral account counts as an asset for the Funeral Grant (Work and Income: definition of assets), so a family who might qualify for the grant of up to $2,697.43 could receive less.

A checklist to run through with a funeral director

Is the money held in a trust separate from your firm? Who is the trustee?
What are the fees at the start, in the middle and at the end, and can they change?
What happens if I move to another town, or want another director?
What happens if your firm is sold or closes?
Does the plan fix the price of listed services, or is it a deposit towards whatever the funeral costs?
Who is paid any surplus, and how is a shortfall handled?
Can I cancel, and what do I get back? (The Funeral Trust allows a full refund within 21 days.)
Is the plan a "recognised funeral plan" for the residential care subsidy?
Is the director an FDANZ member? Only members are bound by its Code to be transparent about costs, and the Commerce Commission can be approached about pricing, according to FDANZ's report.

Other ways to prepare

A prepaid plan is one of several. Savings stay flexible, and banks can release money from an account for a funeral. Our payment plans guide, how to prepay a funeral and the prepaid versus insurance comparison cover the choice. For the cost you are preparing for, see funeral costs.

Funeral insurance works differently from a prepaid plan: you pay premiums over time and the insurer pays a fixed benefit if its conditions are met. Momentum Life's Funeral Insurance is issued by Momentum Life Limited for New Zealanders aged 40 to 75, with no health questions and a benefit of $3,000 to $30,000 towards costs. In its first 24 months it pays only on accidental death (within 90 days of the accident); on any other death in that window every premium for that person is refunded. Premiums can add up to more than the benefit, and the benefit may not cover the whole funeral. For the insurer's standing, A.M. Best gives Momentum B (Fair), and the financial strength page explains it. The funeral insurance hub compares it with other insurers, and the buttons on this page lead to Momentum's own quote.

If you are planning ahead for your own funeral costs

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Life cover See your price Ages 18–65 · $50k–$300k Funeral cover See your price Ages 40–75 · $3k–$30k

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Life cover: Conditions you already have aren't covered for the first 2 years (premiums refunded instead). Suicide isn't covered for the first 2 years, and a few conditions can be excluded permanently.

Funeral cover: Only accidental death is covered for the first 2 years. Total premiums can add up to more than the cover, and it may not meet the whole cost of a funeral.

Insurer: Momentum Life Limited. Financial strength rating B (Fair) from AM Best, affirmed 11 February 2026; B ratings sit in AM Best's 'vulnerable' range. The rating scale is available for inspection at every Momentum Life office in New Zealand. What this means

Already have cover? Keep it. New cover won't pay for a condition you already have in its first 2 years.

Opens Momentum Life's online application; its guidance only covers eligibility. QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.

Adviser's view

No prepaid plan wins on every point, and none of the published terms we read promises that the funeral will cost no more than you paid. The differences that matter are how easily money comes out, who holds it if a funeral home closes, what happens to a surplus or a shortfall, and what the money does to Work and Income tests. Compare those in writing before paying in.

Henry Smith, Financial Adviser (FSP1010699). General information, not personalised financial advice.

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Cite this page QuoteHub NZ (2026). Best Prepaid Funeral Plans NZ (2026): How They Compare. www.quotehub.co.nz/guides/when-someone-dies/best-prepaid-funeral-plans-nz. Updated 2026-10-20.