Compare Funeral Insurance Plans In Australia
Funeral insurance is a type of personal cover which provides your loved ones with a lump sum payment after you pass away
. These funds are typically used to pay for funeral and burial costs; however there is no rule that dictates how the lump sum of money should be spent.
Are funeral insurance plans right for you?
This type of cover is becoming more popular in Australia having been heavily advertised on television and the radio. It may seem attractive as it is usually advertised with a 'no medicals' statement, meaning you do not usually have to provide medical information to apply and be accepted for cover. This may be beneficial for seniors who find it difficult to get cover due to their age, or those who have struggled to get life insurance coverage due to medical issues.
Depending on the scenario, compared to life insurance, funeral cover premiums are typically much higher. The benefit payment is typically smaller as well, with benefit payments usually ranging from around $5,000 to $15,000. So if it is possible for you to get life insurance coverage, it may be a better option. Most life insurance policies offer 'funeral advancements benefits' which gives your loved ones an immediate lump sum, which is usually around 10% of the sum insured.
How to compare funeral insurance plans
If you do decide to apply for funeral cover instead of life cover, be sure to compare a few policies. This is because premiums for this type of cover are usually inflated, it pays to shop around and get a competitively priced policy.
Here are a few points to consider when looking into funeral insurance:
*Check what your premium type is, whether it is stepped or level. Most funeral cover premiums will be stepped and usually keep increasing to keep in line with the change in your age, so make sure you read the fine print.
*Find out how much it will cost for a funeral service and burial plot or cremation service of your choice. This will give you a ball-park idea on how much cover you will need.
*Read the product disclosure statement (PDS) and make sure you understand the differences between each of the policies available.
If you are still unsure as to which provider to go with speak to your financial adviser.
What is the difference between funeral insurance & funeral plans?
Funeral insurance is a type of cover which funds your funeral arrangements. A funeral plan or funeral insurance plan is a document which dictates how your funeral arrangements should be executed. Basically, it outlines instructions on how you would like your funeral to be.
Having both documents, an insurance policy and plan, ensures that there is no ambiguity once you have passed away. It gives your loved ones peace of mind in knowing that your funeral will be carried out as per your wishes.
by: Grant Main
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