Funeral insurance can help protect your family in the event of your death, alleviating the financial burden of having to pay for your final expenses. Funeral cover can allow you to plan ahead, put your affairs in order, and ensure that you receive the funeral service you and your family want.
Applying for Funeral Insurance
Cover is generally guaranteed for Australian residents aged 17 to 80 years old . You can also take out funeral cover for yourself, your spouse or a relative. However, usually death due to natural causes is excluded within the first 12 months of your policy commencing, accidental death will be covered.
Benefits of having Funeral Insurance
- You can insure yourself for anywhere between $5,000 to $30,000 – generally in $1000 increments.
- You cease paying premiums at age 90, after which your cover continues for life.
- Pays the full sum insured if accidental death occurs within the first 12 months of the policy.
- Generally, all your premiums will be refunded if death occurs due to natural causes within the first 12 months.
- No medicals are required.
- There is usually a cooling off period, generally 45 days, during which time you can change or cancel your cover.
How to Claim Your Benefit
The paperwork you typically need to provide your insurer to make a funeral cover claim includes:
- A Death certificate.
- The original policy document and policy schedule.
- Completed claim forms.
Who receives the Benefit?
You can generally nominate up to four beneficiaries to receive the benefit under your policy. Your beneficiaries can usually be nominated either at the time of application or after.
Automatic Increase of Your Benefit
To help keep up with inflation, your benefit amount will generally increase by 5% on each anniversary of your policy application.
Determine your Funeral Costs
While your benefit may be adjusted to keep up with inflation, you might want to consider the affect it can have on funeral costs in the future. Things like burial plots, cremation, and even funeral home costs will increase in line with inflation. Over a 10 or 15 year period, funeral costs may go up considerably.
Another way to ensure your funeral costs don’t get out of hand is having a funeral plan. A funeral plan generally lists how you would like your funeral to proceed. Along with the plan you can explain whether you want a burial or cremation, and whether you want an extravagant or simple casket.
Generally, you can choose to pay your premiums either fortnightly, monthly or yearly. To find the best funeral policy at the best price, shop around and compare funeral policies from a variety of insurance companies.