How to choose the right funeral insurance

How to choose the right funeral insurance

Funeral insurance, put simply, is a lump sum of money paid to your family to cover your funeral costs and any other final expenses in the event of your death.* A funeral can be costly – $4,000 to $14,0001 – so funeral insurance offers peace of mind and assurance that your family won’t be left with the financial burden. It allows your family to choose things like a venue, casket, newspaper listing, hearse, flowers, priest and wake to make you proud, without fear that the cost will cripple the family finances.

How funeral insurance works

Funeral insurance works much the same way as other insurance policies – you pay a premium based on your level of cover & age. Most funeral insurance policies range from between $5,000 and $15,000 cover.

Any Australian resident aged 18–79 can apply for funeral insurance, and you can choose between a single plan or joint plan for your spouse or partner. You may also have the option to insure your children.

Most funeral insurance policy premiums increase with age, however Seniors Funeral Insurance Plus offers a new alternative. It promises that not only will your premiums never increase with age, your premiums will actually be reduced by 5% for every five years you hold your policy, unless you choose to change your cover. It also ensures that the benefit your family receives will never be less than the total premiums you’ve paid.

This new way to manage funeral insurance puts an end to policyholders paying more in their premiums than their benefit amount is worth – a problem once associated with funeral insurance. It’s a breakthrough for the industry, and allows you to be confident that you can continue to afford your policy.

Funeral insurance acts quickly, and not only will you be covered from the day you take out your policy, you can be assured that in the event of your death, your family will have access to cash as soon as the required documentation is received. Your beneficiary or family member can lodge a claim along with documents such as a certified copy of evidence of death, a certified birth certificate, and proof of relationship to receive payment.

In the event of an accidental death, proof of accidental death will be required. And subject to the inclusion in your policy, your family may receive triple the benefit.

Why take out funeral insurance?

In most instances, your Next of Kin (spouse, child, parent, legal partner or sibling) is responsible for arranging your funeral. A funeral director can volunteer options to a family, but ultimately it is the family’s right to choose whatever they wish, providing necessary legal requirements are met.

The cost of a funeral will vary, depending on selections made by the family. Most Australian funerals cost somewhere between $4,000 and $14,000.1 In the event of insufficient funds, your funeral may in some circumstances be Government assisted, however such funerals have limitations on choice and generally come in the most basic form.

A large percentage of funeral expenses are associated with the burial plot, with a single grave costing around $5,000 in built up areas, plus an opening fee of around $1500.2 While cremation is generally a cheaper option, this is not always the case.

Funeral directors usually ask for a deposit on their accounts, with the balance due immediately after the funeral. This can cause intense pressure on the family, and can interrupt the grieving process. Funeral insurance takes this pressure off and leaves your memory untainted by high funeral costs.

What are some of the funeral costs covered?

The good news with funeral insurance is that it offers a lump sum payment of whatever payment amount you choose. What your family spends this money on is up to them, meaning your funeral can be arranged to suit your specific requirements.

According to the NSW State Library2, average funeral costs can be:

  • Service fee – $2,000
  • Removal of body – $300
  • Preservation (if needed) – $210
  • Casket – $1,000–$10,000
  • Grave fees – $3500+
  • Cremation – $1200
  • Headstone – $1500+
  • Clergy fees – $275
  • Flowers – $150
  • Extra car – $330
  • Organist – $275
  • Catering – $300+

What to consider when taking out funeral insurance

Your funeral is not a subject you like to think about, but neither is the thought of the financial burden that may be left to your family. Could your loved ones afford the funeral they would want for you?

A funeral is made up of a number of factors that can be confusing, and when the financial burden is casting a shadow on arrangements, it can be hard for all involved. By choosing the right type of insurance, you can help your loved ones meet their immediate financial needs, so that paying for a funeral becomes one less thing to worry about.

When considering funeral insurance, talk to your family about what you would like from your funeral. Advance funeral planning is important and ensures all personal preferences are met.

You should talk about things like:

  • Cremation or burial
  • Casket choice
  • Location and time of service
  • Who will conduct the funeral service
  • Flowers
  • Music
  • Photography
  • Budget
  • Embalming
  • Who to invite
  • Religion

When you sign up for funeral insurance with Seniors, we include a ‘My Wishes’ pack which enables you to document what you would like for your funeral. Get in contact today if you’d like to discuss our cover.


Sources

  1. Paying for your funeral – How much does a funeral cost? – ASIC’s MoneySmart
    https://www.moneysmart.gov.au/life-events-and-you/over-55s/paying-for-your-funeral#how
  2. Funeral costsFind Legal Answers, State Library of New South Wales
    http://www.legalanswers.sl.nsw.gov.au/guides/wills_estates/funeral_costs.html

Disclaimer

* Cover is for accidental death only in the first 12 months of your policy. If your policy is cancelled and cover ends, no benefit amount is payable and there are no premium refunds after the cooling off period.

This general information only. Please review the relevant PDS available at www.seniors.com.au. Funeral Insurance Products are issued by Hannover Life Re of Australasia ABN 37 062 395 484.