Funeral Insurance for Pensioners

Information verified correct on August 27th, 2016

Looking for the right funeral insurance for pensioners? Compare cover for over 65 year olds with no medical exams.

Planning for funeral expenses is an important consideration for many people. This is especially true for pensioners or those entering retirement, who wish to remove the burden of funeral expenses of loved ones.

Why should pensioners consider funeral insurance?

Funeral insurance can be a good option for pensioners looking to take care of their funeral costs. Unlike some other forms of insurance, funeral insurance:

  • Is fast and easy to obtain. Automatic acceptance up to age 75 or 80 and no medical examinations required.
  • Offers a range of cover options. Choose a benefit amount from $5,000 to $30,000 in intervals of $1,000.
  • Provides a lump sum payment. Usually within two business days, to take care of immediate funeral expenses.
  • Includes an accidental death benefit. Payment of the benefit amount if you pass away from an accident in the first 12 months and up to three times the benefit amount after that.

Do I need to undergo any medical exams?

There is usually no medical underwriting involved with funeral insurance. However the exception is after a certain age (depending on the insurer), when a medical examination will be required before cover is offered. The only health question normally asked is whether you are a smoker. If you smoke, you will pay a higher premium.

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The amount you would like your family to receive to cover your funeral expenses. If you are not sure what costs that are involved in a typical funeral arrangement, it is advised to speak to an insurance consultant.
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Details Features
Ezicover Funeral Advantage
Ezicover Funeral Advantage
Receive up to $15,000 in funeral cover and apply with guarantee acceptance as long as you are an Australian resident aged between 35 and 70 years.
  • Lump sum cover up to $15,000
  • 30 day cooling off period
  • Guaranteed acceptance with no medical
Go to site More info

What are the age requirements for funeral insurance plans?

ProviderAge requirements
AIA Funeral Protection InsuranceBetween 11 and 75
Apia Funeral InsuranceBetween 45 and 75
Aussie Funeral InsuranceBetween 18 and 79
Australian SeniorsBetween 18 and 79
Bupa Funeral InsuranceBetween 18 and 75
Clearview Funeral InsuranceBetween 18 and 75
Freedom Funeral InsuranceBetween 0 and 80
GIO Funeral InsuranceBetween 45 and 75
InsuranceLineBetween 21 and 80
Metlife Funeral PlanBetween 18 and 70
NIB Funeral InsuranceBetween 17 and 80
Real Funeral Expenses CoverBetween 18 and 79
Suncorp Funeral InsuranceBetween 45 and 75
Zurich Funeral InsuranceBetween 35 and 70

Why should I get funeral insurance?

Simple application process

How can this help me?

  • You can apply over the phone or online
Funeral insurance can be obtained without a long application process.
  • No medical examinations*
Unlike some other forms of insurance, there is no medical examination involved. The only health question you are asked is if you're a smoker. If you are a smoke you will have a higher premium.

Payout for your dependents

What does this mean?

  • Fast payout
You benefit is paid out to your children or family, usually within two days of your passing.
  • Lump sum payment
One whole payment is made to cover your funeral and final expenses.
  • Accidental death cover
Your benefit is paid in full if due to an accident, you pass away during the waiting period of your policy.
  • Terminal illness
Your benefit is paid if you're diagnosed with a terminal illness after the waiting period of your policy.

*No medical examinations applies if you're within the policy's age requirements. Policies may not cover over a certain age (e.g. 90 years old) or require a medical examination

Look out for these features if you're after cover

Look out for these features in your policy if your after funeral insurance.

Features that can protect pensioners

What does this mean?

  • Choice of premium type
Choose between levelled or stepped premiums. A levelled premium doesn't rise as you get older which can be useful as you start relying on your pension.
  • Premium caps
This caps your premiums (when they reach a certain total) to ensure that you don't spend more than what your family will be paid out.
  • Payout guarantees
You're paid out the greater between your total premiums paid and your sum insured.
  • Grace periods
If there ever comes a time where you're unable to make a premium payment, some policies will offer a grace period (usually 1-3 months) for you to reinstate payments. You are still covered for accidental death during this time.

Extras

How can this help me?

  • Global coverage
Cover from anywhere in the world, around the clock.
  • Free will kits
Some policies include a will kit: Use this to help with your estate planning.

How much will funeral insurance cost me?

The above premium estimates are based on Australian Securities & Investments Commission's 2015 study.

Can I pay for cover with my pension?

Based on the above estimates, if you were to start paying for a premium at the age of 65 years then you would pay on average, $620 in premiums per year.

Fortnightly cost

The fortnightly amount you would be expected to pay under these circumstances is roughly $24 per fortnight.

Consider your fortnightly expenses

If you are able to take out $24 per fortnight after covering all your living expenses with your pension, then you can afford funeral insurance.

Consider your personal circumstances

While you may be able to afford funeral insurance, consider your personal circumstances. You may wish to save for a funeral instead or put your left over pension elsewhere.

Keeping payments affordable with a fixed income or pension

Funeral insurance is usually paid with a choice of stepped or level premiums.

  • Stepped premiums. Calculated on your age at the time of applying and increase each year as you get older.
  • Level premiums. Fixed amount agreed upon at the time of taking out your policy and remain the same for the life of your policy.

Which payment type is right for me?

If you are on a low fixed income, such as a pension, level premiums mean your funeral insurance will always cost the same.

Beware of the automatic indexation option

If your policy has automatic indexation enabled, your premium may still go up even if it's levelled. This will increase the amount you've insured to keep pace with inflation. If you're on a fixed income, it may be necessary to opt out of this option.


Am I covered if I have been diagnosed with a terminal illness?

Funeral insurance will pay you out for a terminal illnesses after the policy's waiting period. This is usually a 12 month period, depending on the policy.

What if I become terminally ill during or before the waiting period?

During the first 12 months of your policy, most insurers will only pay a benefit if you pass away as the result of an accident. If you are diagnosed with a terminal illness during that 12 month period, most policies will offer a refund on your premium payments.


Be aware of these funeral insurance pitfalls

Common mistakesHow do I avoid this?
  • Paying more in premiums over the years than your funeral would actually cost you
  • Premium caps. Choose a policy that caps your premiums when you’ve paid the benefit amount, with cover continuing free after that.
  • Not being able to keep up your payments and losing all you have previously paid
  • Premium pause options. Look for a policy that offers a premium pause option or a grace period if you can't make payments.
  • Not taking out a high enough benefit amount to cover your funeral costs.
  • Automatic indexation. Take out slightly more than you would currently need to allow for inflation over time or to opt for automatic indexation.

Television and other forms of advertising

Funeral insurance is heavily advertised to pensioners on daytime television and through telephone cold calling. It is promoted as being a relatively small cost (often the price of a cup of coffee) in return for the peace of mind of knowing you won’t be burdening your loved ones with your funeral expenses.

However, unless you opt for a level premium, the cost will increase over time to where it could become unaffordable. Purchasing funeral insurance should be a considered decision, where your rights and options are clearly explained; something which is simply not possible in a 30 second commercial.

Steps to take if you're not satisfied with the policy you've purchased

If you find yourself being rushed into taking out a funeral policy that, upon reflection, isn’t what you wanted, you can still get your money back if you are within the cooling off period.

Australian Consumer Law entitles you to a minimum 10-day cooling off period if you buy a policy from a salesman, so if you change your mind, you can ask the insurer for a full refund of any premium paid, providing you are within that period. Fortunately, most insurers these days offer a 30-day cooling off period, so you should have plenty of time to be able to review your policy and cancel it if it doesn’t meet your needs.


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