Funeral Insurance in Australia

Funeral insurance is a parting gift to your loved ones. It takes away the financial strain that comes with planning a funeral, so your family can focus on giving you a fitting farewell, without worrying about the cost.

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Name	Product	Maximum Cover	Maximum Entry Age	Minimum Sum Insured	Premium wont increase with your age	Expiry Age
Real Guaranteed Funeral Insurance Flexi Plus		$15,000	79	$3,000		No expiry age as long as premiums are paid	Receive up to $15,000 in funeral cover. Premiums reduce by 5% every 5 years you hold your Policy.	Get quote View details	Compare	loading Fetching your data...
Medibank Funeral Insurance		$15,000	79	$3,000		No expiry age as long as premiums are paid	10% discount for Medibank health members.	Get quote View details	Compare	loading Fetching your data...
Australian Seniors Funeral Insurance Top Cover		$15,000	79	$3,000		No expiry age as long as premiums are paid	Get up to $15,000 in funeral cover with Australian Seniors Funeral Insurance.	Get quote View details	Compare	loading Fetching your data...
Guardian Platinum Funeral Insurance		$15,000	75	$3,000		No expiry age as long as premiums are paid	Get up to $15,000 in funeral cover with Guardian Funeral Insurance.	Get quote View details	Compare	loading Fetching your data...
Insuranceline Funeral Insurance		$15,000	80	$1,000		No expiry age as long as premiums are paid	Take out an InsuranceLine Funeral Insurance policy and you could receive a bonus $100 gift card. T&Cs apply. Ends 30 June 2020.	View details	Compare	loading Fetching your data...
Apia Funeral Insurance		$15,000	75	$5,000		No expiry age as long as premiums are paid	Get up to $15,000 in funeral cover with Apia Funeral Insurance.	View details	Compare	loading Fetching your data...

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What is funeral insurance?

Funeral insurance promises to pay a lump sum to your family when you die, so they can cover the cost of your burial or cremation without using their own money, or even going into debt.

It typically appeals to people over the age of 50 who can no longer find an affordable life insurance policy, perhaps due to pre-existing medical conditions. Funeral insurance also suits people who struggle to save by themselves.

How does funeral insurance work?

You pay a regular fee, usually every fortnight or every month, and your insurance company promises to give a lump sum payment to your family when you die. Typically, insurance companies will offer between $5,000 and $15,000 as a benefit.

Sometimes, when you reach a certain age, you no longer have to pay insurance premiums, but your insurance company will still pay out the benefit when you die.

You can usually pay for funeral insurance in two ways: either with level premiums or with stepped premiums.

• Stepped premiums: Based on your age, stepped premiums will increase as you get older.
• Level premiums: These are more expensive to begin with, but they don't increase over time.

What will funeral insurance cover?

Funeral insurance gives your estate a lump sum when you die, so that they can pay for your funeral without worrying about the cost. Typical funeral expenses include:

• Newspaper notice. Printed notices can easily cost hundreds of dollars.
• Casket or urn. Caskets cost between $800 and $15,000. Urns can also cost hundreds of dollars.
• Cremation or burial. Both can reach well over $1,000.
• Funeral service. Everything from the venue and director fees to dressing and embalming costs.
• Transport. Cars for close family members can cost hundreds of dollars.
• Flowers. A large casket spray can cost up to $700.
• Gravestones. Simple grave markers can cost up to $2,500.
• Wake. Venue hire as well as food and drinks may be provided.

How much do funerals typically cost?

Funerals can cost as little as $4,000 for a simple cremation, so if you want cheap funeral insurance, there are certainly options out there. However, funerals can cost up to tens of thousands of dollars for a more elaborate ceremony.

A 2018 Finder study analysed the average price of funerals in major Australian cities. The table below shows how the costs compare.

What are the pros and cons of funeral insurance?

Funeral insurance has its benefits and its drawbacks. Take some time to understand these properly, so that you don't buy a policy that doesn't fit your personal needs.

What else does funeral insurance cover?

Funeral insurance can cover more than just the cost of your burial or cremation. Some policies offer additional benefits, which could make a policy more worthwhile:

• Accidental death cover. Some insurers will double, or even triple, your payout if you die accidentally. Sometimes it comes as standard, other times it's an optional extra.
• Terminal illness cover. Some policies will pay your benefit if you're diagnosed with a terminal illness. You can be involved in the planning of your funeral, or use the funds however you see fit.
• Accidental injury benefit. Some policies will pay a lump sum if you suffer a serious injury under a certain age. Eligible injuries include paralysis, loss of sight and loss of limbs.
• Child cover. Some funeral insurance policies will also pay out a benefit if your child is seriously injured or dies, although this is usually an optional extra.

What to look for when choosing funeral insurance

In addition to the benefits above, there are a few key features that you should always consider when shopping for a policy, so that you can find the best funeral insurance for you:

• Benefit amount. If you want a large and lavish funeral, there's no point in choosing a policy with a low benefit payout.
• Premium caps. If you're worried you won't be able to afford repayments further down the line, choose funeral insurance with capped premiums.
• Exclusions. Always read the product disclosure statement (PDS) carefully. Often, insurers won't pay out if you die of an illness within 12 months of taking out your policy.
• Grace periods. Some insurers will offer grace periods if you're ever in financial hardship. The level of cover might be reduced, but you won't be forced to cancel and lose all your money.

Funeral insurance for seniors

Funeral insurance usually appeals to seniors more than any other age bracket. However, it's important to know that companies won't offer cover to people over a certain age, usually somewhere between 65 and 80, depending on the insurer.

Luckily, there are still plenty of funeral insurance options for seniors under the age of 80.

Funeral insurance for families

If you want your whole family to have the security of funeral insurance, you may want to consider funeral insurance for families or funeral insurance for couples.

Buying funeral insurance as part of a family or couple can come with a couple of key benefits, including multiple person discounts and convenience.

Is funeral insurance worth it?

Funeral insurance is a good option for people who want to help their family out financially, but there are some traps to watch out for. A couple of key drawbacks are:

• Paying too much: Most funerals cost less than $10,000. However, If you've held a funeral insurance policy for many years, you may have invested far more than this into the premiums.
• Rising premiums: If you buy a funeral insurance with stepped premiums, you may find the payments become unaffordable in your later years. If you cancel, you won't get anything back.

Are there other ways to pay for a funeral?

Yes. Funeral insurance isn't the only way to pay for your funeral. Consider whether these other options are right for you:

• Prepaid funeral. Some funeral directors let you prepay for your own funeral. However, this means that your money is tied up with one company. If it goes bust, your savings could be lost.
• A funeral bond. An investment through a friendly society or life insurer. Funds are exempt from the pension income test but the funeral director may keep anything your family doesn't spend.
• Superannuation. If you have super, your family may be able to pay for your funeral with the remaining balance. However, it can take a while to access, so they might have to pay upfront first.
• Savings. If you have the discipline to save independently, it might be worth putting some money away every month with the aim of building a lump sum that your family can use for funeral costs.

What questions should I be asking about funeral insurance cover?

• Q: Why do I need funeral insurance?

  A: If you don't have funeral insurance, the financial burden of paying for your funeral will fall on your loved ones at a time when they are already experiencing a loss.

• Q: How much cover do I need?

  A: It depends on the type of funeral you want. The average funeral costs around $4,000 for a basic cremation and anywhere up to $14,000 for a more elaborate service.

• Q: What is an Automatic Indexation Benefit?

  A: This is where your cover increases every year in line with inflation (usually around 5% per year).

• Q: What is an Early Payment Benefit?

  A: This is when an insurer pays out your benefit early if you are diagnosed with a terminal illness, allowing you to take care of your financial affairs.

• Q: Can I nominate a beneficiary?

  A: Yes, you can nominate a person to receive your funeral insurance benefit. Otherwise, it will be paid to your estate or to the surviving policyholder if it is a joint policy.

• Q: Is tax payable on funeral insurance?

  A: No, the benefit paid upon your death is generally tax free.

• Q: Does my funeral insurance cover me outside of Australia?

  A: Yes, cover is usually provided worldwide. However, if you pass away overseas, your funeral insurance will probably not cover the cost of transporting your remains back to Australia.

• Q: What causes of death am I covered for?

  Most policies will cover for all causes of death after the policy has been held for 12 months. If your death occurs within the first 12 months of holding the policy then you are only covered for accidental deaths.

• Q: Does funeral insurance include life insurance?

  Standalone funeral insurance typically doesn't include life insurance cover. You can however get life insurance that has a provision for funeral expenses.

• Q: How many funeral insurance policies can I have?

  You can have more than one funeral insurance plan however it is not advisable as one policy may not payout if you have another policy in place. Instead, look to increase your sum insured if your existing funeral insurance is not enough.

• Q: Can I get couples funeral insurance?

  You can get couples funeral insurance and this is commonly known as a joint policy. The main condition of joint policies is that both policy owners will have to pay with the same premium structure.

• Q: How do I change my details if I have bought a plan already?

  You can change your details by getting in contact with you funeral insurance provider. You are able to find these details on your insurers websites contact page.

• Q: Can funeral insurance go towards paying off debts?

  Funeral insurance is designed to cover funeral expenses and final expenses that you have, including any debts.

• Q: Can I opt out of my funeral insurance policy?

  You can typically opt out of your funeral insurance policy if you are still within the cooling period. This period is typically 30 days and it allows you to get a refund on any premium paid.

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