Funeral insurance provides valuable financial assistance to your family to help pay for your funeral, and other unpaid bills, when you pass away. It helps to ensure your final expenses are taken care of, relieving your loved ones during this emotional time.
How funeral insurance works?
Funeral insurance is paid in the form of a lump sum benefit your family can use to pay immediate expenses, such as your funeral service or any outstanding debts you may have.
It works in much the same way as other types of insurance, where you pay a fortnightly or monthly premium calculated according to factors such as your age and the amount of cover you require.
While traditionally burial services were always held in a church, mosque, temple, synagogue, or other religious building, of recent times there has been more of a trend to personalising the service and having the service in parks, by rivers, on beaches, and even at local football ovals.1
What it covers?
A funeral in Australia can cost anywhere between $4,000 to $15,0002, which can be a large sum of money for your family to find at short notice. Having funeral insurance means they can provide you with a fitting send-off that honours you and celebrates your life in a manner that suits your individual style.
By choosing a benefit amount that matches your needs, you and your loved ones can take comfort in the knowledge that whatever immediate expenses may arise at the time of your passing, your funeral insurance will cover them.
A funeral insurance lump sum payout can be used to cover things such as:
- your funeral service
- outstanding bills or expenses
- any immediate financial needs your family may have at the time.
What to consider when purchasing funeral cover?
When deciding whether funeral insurance is right for you, you should consider the style of funeral you would like and then ask yourself whether your family could afford to pay for it at short notice? In most cases, the answer would be ‘no’ and this is where funeral insurance can help to cover the costs and other related expenses.
Who normally pays for your funeral?
In most cases, the responsibility for arranging and paying for your funeral falls on your next of kin (your spouse, child, parent, legal partner or sibling). So, by taking out funeral insurance, you can take comfort in the knowledge that you are giving them one less thing to worry about when the time comes.
You should consider the following when choosing the benefit amount of your funeral insurance cover:
- the likely cost of your funeral service
- any bills or small unpaid debts that you may leave behind.
Your family might be eligible for a government bereavement payment, depending on your financial circumstances at the time of your passing3, but when compared with the cost of the average funeral, it may fall considerably short of what would be needed.
Funeral expenses will vary depending on your personal wishes and your family’s needs, but at the very least costs can include:
- funeral director fees
- burial fees or cremation fees
- death certificate
- newspaper notices
Learn more about how much funerals can cost.