Making Sense of Funeral Insurance in Australia
Article by Jeremy Smith
Does it make sense for an individual to buy funeral insurance? The question will depend on an individual’s circumstances, but the answer is “yes” more often than most people are willing to admit. Funeral plans in Australia can be quite expensive, and the few people are comfortable thinking about the financial burden that their family will face when they pass on. In order for an individual to decide whether or not funeral insurance makes sense for them, they will need to do some research of their own. Nevertheless, it is helpful to look at some general information on the subject.
The first thing that people will need to consider is if they need funeral insurance if they already have life insurance. While the two are not the exact same thing, they have obvious similarities. Both pay out in the event of the policyholder’s death, but life insurance is not always designed to accommodate the costs of a funeral. A life insurance policy is designed to provide a steady source of income after an individual has passed on, usually for a period lasting two or five years. While the income helps a family remain financially secure for several years, it often does not provide a lump sum payment up front to pay for the costs of the funeral. This means that the family might have to take out debt in order to pay for the funeral, and pay off the debt over several years using the life insurance income.
An individual who has reason to believe that their life insurance policy will not be enough to pay for the funeral without financial hardship, or who has no life coverage at all, will likely benefit from signing up for funeral coverage. This is especially true for people who do not qualify for life coverage that they can afford because of their age or a medical condition. In many cases, an individual can sign up for funeral coverage regardless of their age or medical situation, although many of these policies can be quite expensive.
In addition to funeral coverage, an individual may also want to purchase final expense coverage. Final expense coverage pays for any debts owed by the policyholder, so that the debt is not passed on to their family members.
The important thing to think about is how an individual’s family and loved ones will be financially affected by their death. If the costs can’t be covered without becoming a burden, when funerals typically cost thousands of dollars, it is best for an individual to sign up for a funeral coverage policy.
About the Author
Author is a freelance copywriter. For more information about Life insurance, please visit http://www.guardianinsurance.com.au/.