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Funeral Insurance Plans in Australia

Funeral cover provides a lump sum payout to your beneficiaries after a valid death certificate has been issued. This lump sum helps your loved ones pay for funeral-related expenses, like your burial or cremation and memorial service. You can generally choose the level of cover you want, starting from as low as $5,000 all the way up to $15,000.

Russell Cain

Fact Checked

Updated: 19 May 2024

When you’re thinking about your future it’s natural to start thinking about your death. And while you’re contemplating the legacy you’ll leave behind you should also consider the funeral insurance cover you need in order to pay for your final departure.

One way to do this is to explore the variety of funeral insurance plans available and choose the one which will best help your loved ones cope with the expenses of your passing.

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How much does a funeral cost?

Generally, the average cost of a funeral in Australia can range anywhere from $3,000 to $50,000. This amount differs depending on various expenses, including:

While it’s not nice to think about your death, the consequence of not doing so might leave your loved ones with the burden of having to plan and pay for your final expenses, which could leave them in debt.

Estimated funeral-related costs:

7 Ways to cover the cost of your funeral

Part of planning for your funeral is to really think about what kind of funeral you want. Once you’ve done this, you can work out how much cover you’ll need and then start to compare the different options available to pay for your funeral.

How to choose the best funeral insurance plan

There are a few steps you need to consider when it comes to arranging the details of your funeral. While some of these might not be relevant to your specific requirements, they will give you a good starting point to help you make the decision that’s right for you.

Life insurance vs funeral insurance

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Life Insurance
Whole Life Insurance
What’s covered?
Both natural and accidental causes of death are covered with the usual exclusion of suicide during the first 13 months.
Merely covers you for death, with only accidental death generally being covered during the first 12 months of your policy commencing.
Cover amount
Generally, there is no limit to how much life cover you can take out, however, it’s best to check with your insurer.
You can choose your level of cover, usually between $5,000 and $15,000, depending on the insurer.
Who is covered?
Usually, the focus is predominantly on the individual, but select insurers will let you add your spouse and kids.
You can choose to cover only yourself or take out couple’s cover. Some companies even offer burial insurance for the entire family.
Payouts
Most insurers include a funeral advancement benefit, which pays out fairly quickly upon receipt of a valid death certificate and claim forms. The full insurance benefit will take longer but can be used for whatever your beneficiary wants; mortgage payments, daily expenses etc., not just the funeral expenses.
Payouts usually occur within 3 to 7 days of a valid claim being lodged. The lump sum payout must be used for funeral-related costs.
Ease of application
Acceptance is generally determined by your risk profile (age, health and smoking status) and acceptance is not guaranteed.
No medicals or medical questions required and generally guaranteed acceptance is offered.
Premiums
Generally, premiums are more affordable because of your risk profile being taken into consideration. However, it’s important you determine whether you have stepped or level premiums.
Premiums can be more expensive than term life insurance because the cost of guaranteed acceptance is built into the price. You’ll generally have a choice between stepped vs level premiums.
Capped vs non-capped premiums
Usually, life insurance does not offer capped premium options.
Capped premiums are available from some insurers, ensuring you’ll never pay more in premiums than your policy is worth.

Which is best: a funeral plan or life insurance?

Whether funeral plans or life insurance is best depends on your personal circumstances. For instance, if you have health problems and been declined for life cover in the past, then a funeral insurance plan might be a better option because of guaranteed acceptance. However, if you want a policy that will protect your family should you die, then life cover might be better.

Can I get funeral cover with no waiting period?

Yes, you can get funeral cover with no waiting period because acceptance is guaranteed. However, most insurers will only pay out a claim upon receipt of a valid death certificate and if death was due to an accident during the first 12 months of your policy commencing. After that natural causes will be covered.

No one wants to think about their death, it’s an inevitable part of life. Take the first step in the planning process by comparing funeral policies from a variety of insurance companies and find the best cover at the most affordable price.

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Specialist

Russell is the founder and CEO of Life Insurance Direct and has been quoted in The Sydney Morning Herald, The Age, Independent Financial Adviser, Risk Adviser, Adviservoice, and Insurancenews. Russell has over 15 years’ experience in the Australian life insurance & financial services sector and is instrumental in driving the latest innovations in our insuretech platform.

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