Should I Buy Funeral Insurance?
Article by xLife
Funeral insurance sits under the same umbrella as life insurance, income protection insurance and trauma insurance, and has been widely advertised on Australian television. We’ll all have a funeral one day – so why isn’t funeral insurance a more popular or common investment? We investigate when you should, and should not, buy funeral insurance.
Do you have chronic health conditions? For those with chronic health conditions, life insurance is usually far too expensive. Funeral insurance is a fantastic way to ensure you don’t create a burden for your family after you die, without paying massive life insurance premiums.
Funeral insurance premiums are based on your age and sex, smoking status, and in most cases no medical questions are asked. So if you are not able to apply for life insurance due to medical conditions, or a high loading is placed on your premiums, funeral insurance may be a good option to pay for any accumulated debts when you pass away.
Is there an age limit?Funeral insurance age limits are usually slightly higher compared to standard life insurance policies, however they do vary between insurers so check the product details. So if you are in an older age bracket and cannot apply for life insurance, again a funeral insurance plan may be a good alternative.
Do you live paycheck to paycheck?Even for those on a tight budget, there are affordable personal insurance options available. One of these options may include funeral insurance, which starts from a few dollars a week – if you can do without a single block of chocolate at the supermarket, you can afford funeral insurance.
Do you have specific wishes for your funeral? If you have specific requests for your funeral, it makes sense to ensure that the money is available to fulfill them. Making adequate funeral insurance plans will help ensure your funeral service meets your expectations and those of your loved ones. Funeral insurance usually gives you the option of insuring for amounts up to around ,000 depending on the insurer. You may like to calculate how much you would like to spend on your funeral, and how much you would like to leave for your family when you pass away. Doing this may help ensure that you are not over-insured and that your funeral insurance premiums aren’t too high!
Do you have life insurance? If you have life insurance, most plans allow for an immediate payout for the funeral on presentation of the death certificate. Consequently you may not require an additional funeral insurance policy, however this depends on the life insurance policy you hold so be sure to check your product disclosure statement.
Do you have enough savings to cover your funeral expenses? If you have enough savings to cover the cost of your funeral, you probably don’t need funeral insurance.
Are you getting older?Yes, I realise this is a trick question… we’re all getting older! However, if you’re over 50 and in reasonably good health, the premiums for funeral insurance might not be worth it because you can apply for a life insurance policy for the same level of cover and the premiums are usually far cheaper. So before you make your final decision, see if you can apply for life insurance first. If your application is denied or premiums far too high, then funeral insurance may be the right type of policy for your situation!
About the Author