Best funeral insurance

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Best funeral insurance in October 2024

• • Top pick for trust: Apia
  • Top pick for good value: Woolworths

  Read the detailed methodology we used to choose these policies.

  Top pick for trust: Apia

  

  What we like about Apia:

  • It's issued by TAL, which insures some 4.5 million Australians and had only 8.9 claims-related disputes per 100,000 lives insured.
  • Apia offers a 5% discount if you add another adult to your funeral insurance policy. One senior-friendly feature is that it will also reduce a policyholder's premium by 5% following their 84th birthday.
  • Only level premiums are offered – this means your insurance generally won't increase in price as you get older. Stepped premiums, on the other hand, tend to go up on your policy anniversary.

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  Top pick for good value: Woolworths

  
  What we like about Woolworths:
  • Your premium is guaranteed to reduce by 5% for every 5 continuous years that you hold your policy. The only other provider with a similar feature was Medibank, but its discount was just 3%.
  • Reassurance that a payout with Woolies won't be less than the total you've paid in premiums since taking out cover.
  • Further ways to save. Members of Woolies' popular Everyday Rewards scheme get 10% off for the life of their policy. This was more attractive than Real Insurance's promise of 10% back in premiums after 12 months of your policy.
  Learn more about Woolworths funeral insurance

  How we chose top picks for funeral insurance

  Our editorial team looked at 25 insurance providers in Australia that offer funeral cover. Most brands offer payouts built within their life insurance policies (the benefit is often referred to as "final expenses" cover).

  However, we only included providers that offer standalone funeral insurance.

  Those that let you take out standalone funeral cover were: Australian Seniors, Apia, Guardian, Insuranceline, Real Insurance and Suncorp.

  We chose each top pick because of its value and features compared with 5 other providers in Australia as of October 2024.

  Here's more on how we chose each top pick.

  Top pick for good value

  Our editorial team analysed 8 brands based on their existing sign-up offers and ongoing premium savings.

  Additionally, we took into account policy features including:

  • Cover limits
  • Guaranteed acceptance
  • Option to increase cover in the future
  • Terminal illness cover
  • Accidental death cover
  • Accidental serious injury
  • Loyalty discounts
  • Bonus cover
  • Payout times

  We settled on Woolworths due to its straightforward policy that offers peace of mind around premium payments and payouts.

  With Woolworths, you'll never be paid out less than the total you've paid into a policy over time.

  Woolworths offers level premiums which don't go up as you age. Some providers set up their policies with stepped premiums, which increase every year at the "policy anniversary".

  In times of high economic uncertainty, it's good to know your premiums will actually reduce by 5% after 5 continuous years – this reduction was 2% more than any other provider.

  Not all providers offer these types of policy guarantees. For example, Suncorp's policy wording states: "The cost of your cover is not guaranteed to remain the same each year."

  Apia states: "Premium rates are not guaranteed."

  In addition to death cover, Woolies offers terminal illness cover which isn't the case with Insuranceline, Apia or Suncorp.

  It also covers accidental death and accidental injury fixed at 3 times your benefit limit. Some competitors only cover accidental death for the first 12 months of a policy.

  Top pick for trust

  Our winner was Apia, followed by Suncorp, both of which are underwritten by TAL* and share the same core policy features.

  Apia came out on top for specifically calling out that it sets level premiums that won't typically increase with age.

  To settle on our pick for trust, we looked at 11 insurers that share claims and claims-related dispute data with Moneysmart.

  We reviewed 4 performance criteria as follows:

  1. Claims acceptance rate
  2. Average claim time
  3. Disputes per 100,000 lives insured
  4. Policy cancellation rate

  *TAL outperformed the industry average in each of these markers for the year to 31 December 2021. These are the most recent figures available.

  With a policy cancellation rate of only 4.4%, TAL was far lower than the industry average of 7.0%. It bettered Hannover Re (8%) and Swiss Re (33.9), which are the main competitors for direct funeral insurance in Australia.

  TAL also had the lowest average claim time of the 3 main underwriters, at 0.6 months. The industry average was 0.7 months.

  What's more, TAL had just 8.9 claims-related disputes per 100,000 lives insured. The industry average was 10.3 and once again it outperformed Hannover Re (12.6) and Swiss Re (10.6).

  It should be noted that TAL's high claims acceptance rate of 99.5% was still lower than the 100% scores from 7 other insurers.

  It's worth noting that Insuranceline is also underwritten by TAL. We discounted Insuranceline in this category as it had a low average score of 2.0 from 78 reviews on Product Review.

  Despite each having zero disputes per 100,000 lives insured, AIA, NobleOak and Zurich were all excluded by our research team as these brands do not offer standalone funeral cover. Instead, a funeral payout sum is included within their life insurance policies.

  Why compare life insurance with Finder?

  • You pay the same price as buying directly from the life insurer.

  • We're not owned by an insurer (unlike other comparison sites).

  • We've done 100+ hours of policy research to help you understand what you're comparing.

  Best funeral insurance: Features to look for

  	Feature	Details	How to compare
  	Benefit amount	This is the lump-sum benefit your policy will pay to your beneficiaries when you die.	Most plans in Australia range between $3,000 and $15,000 in cover. Apia and Suncorp let you increase the sum insured to $25,000. Australian Seniors pays an accidental serious-injury benefit of up to $45,000 (three times the Funeral Insurance Benefit Amount).
  	Guaranteed acceptance	There's no medical exam or blood test needed prior to being offered cover.	As long as you meet the age eligibility requirements – usually ranging between 40 and 80 years of age – you'll automatically be accepted for your insurance.
  	Offers	Many providers offer deals when you sign up to a policy as well as loyalty discounts and early cash-out options.	There are 2 offers worth mentioning: Real Insurance gives back 10% of your premiums after 12 months and Australian Seniors gives a 25% bonus cover when you turn 85.
  	Policy expiry age	Whether your policy ends during your lifetime will be an important point of comparison for some people.	5 out of 8 providers we compared specify that policies never expire as long as you keep up with your premium payments. 3 brands – Real Insurance, Australian Seniors and Guardian Insurance – offer cover until the policyholder's 100th birthday.
  	Premium choice	A choice of stepped premiums (that increase over time) or level premiums (a fixed amount for the life of the policy).	Choose how affordable your cover is in the short and long terms based on your needs.
  	Payout time	Some providers call out that payouts are typically made within 1 day of receiving all necessary claim details.	3 providers – Suncorp, Apia and Insuranceline – called out their fast payout times of within 24 hours.
  	Terminal illness benefit	Get an early payout if you're diagnosed with a severe illness for which there's no known cure.	All 8 providers we compared offer this benefit payment.
  	Accidental death cover	If you pass away after an accident, your family may get a payout of 3 times the amount you were insured for.	Again, all 8 providers on Finder offer this cover type as standard. They also offered a lump sum for an accidental serious injury.

  
  Our expert says
  "Before you get funeral insurance, make sure the provider offers capped premiums. This means your funeral insurance payout shouldn't exceed the total amount you've paid in premiums. It's really important a policy has this. Otherwise, you may as well just be putting money aside. If you're unsure, ask the insurer directly."
  Gary Ross Hunter
  Editor, Insurance

  How much will a funeral actually cost me?

  The cost of funerals varies greatly, with a basic cremation costing around $4,000 and a more elaborate service costing anything up to $15,000. Factors that might influence the cost of your funeral include the following:

  • Whether there are religious or family requirements
  • Whether there will be a wake
  • Whether you are being buried or cremated
  • If buried, the cost of a burial plot, casket, gravestone, transportation, etc.
  • If cremated, the cost of an urn, flowers, funeral director, etc.
  • Mandatory costs such as newspaper notices, death certificate, etc.

  The amount of funeral insurance you need will depend largely on the type of funeral you're planning for.

  When will funeral cover typically pay out benefits to my dependants?

  Understanding whether your dependants will be paid is essential to ensure your policy provides value. Payment is typically dependent on 2 factors:

  1. The circumstances of an insured person's death or terminal illness
  2. How long after cover is issued the death or terminal illness occurs

  Example breakdown of how a funeral insurance policy may pay out

  Cause of death	Timeline	What's paid?
  Accident	During the first 12 months of holding the policy	The sum insured
  Sickness and other causes	During the first 12 months of holding the policy	Premiums are refunded
  Due to natural causes, accidents, sicknesses and other causes	After 12 months of holding the policy	The sum insured
  Cause of terminal illness	Timeline	What's paid?
  Due to natural causes, accidents, sicknesses and other causes	During the first 12 months of holding the policy	No payment – the policy remains and you become eligible at the 12-month mark
  Due to natural causes, accidents, sicknesses and other causes	After 12 months of holding the policy	The sum insured

  Make sure you check the product disclosure statement for exact situations where a payout will be made.

  What should I be aware of with funeral insurance?

  Funeral insurance has a few potential pitfalls you'll want to look out for, including the following:

  • Paying more over time than a funeral would cost. Choosing a policy with capped premiums would help you to avoid this risk. Some policies now state that you'll never receive less money than the total amount you've paid in premiums.
  • Choosing the cheapest policy. If it doesn't cover all the basic benefits, you could find yourself underinsured.
  • Falling behind with premium payments. This could lead you to having your policy cancelled. Finding a policy with a "premium pause" option could give you breathing space.
  • Choosing a stepped premium policy if you're on a lower income. Stepped premiums increase with your age and could become unaffordable later in life.

  Keep in mind: When comparing policies, get on the front foot by raising any concerns or questions with a provider when reviewing their insurance.

  Frequently asked questions

  • What's the best funeral insurance in Australia?

    There's no "best" funeral insurance, as it depends on your personal circumstances. But looking for competitive pricing, good cover options and underwriters you can trust will put you on the right path. That's why our top picks were Medibank, Woolworths and Apia.

  • How much is funeral insurance per week?

    Finder research has found that funeral insurance can cost just $3.10 per week. The price of your cover will vary depending on factors such as your age and the benefit amount.

  • Are any steps being taken to improve trust of funeral insurance?

    In July, the industry's new Life Insurance Code of Practice is coming into force. The self-regulated code is – according to the Financial Services Council – bringing in more than 50 new protections for consumers, including those aimed at helping the more vulnerable in the community.

    The Council of Australian Life Insurers (CALI) told ABC News there'd be specific obligations for funeral insurance providers to call out that policies are not savings plans and that the total sum of premiums paid can exceed the payout.

  • Aside from funeral insurance, what other options are available to me?

    If you don't feel that funeral insurance is right for your situation, there are several other ways you can cover your funeral expenses:

    • Pre-paid funeral. Either in a lump sum or through payments to a funeral director. You could also put the money aside in a high interest savings account to ensure it is there when needed.
    • Funeral bond. Your money is invested on your behalf by an insurance company or friendly society so that it holds its value and is exempt from taxation.
    • Super or life insurance. Life insurance inside or outside of super will cover your funeral expenses, although payment from a super fund can take time.

    While it's a great idea to shop around for a competitive price, keep in mind that searching for the cheapest policy alone can leave you with less than you were hoping for. Make sure you compare cover and features with care before you go with a policy.