Over 60 and considering seniors funeral insurance? Learn what to look for in a policy and compare your options
If the financial security of your loved ones is important for you, then planning for your funeral is a must. A funeral insurance policy can help cover your final expenses when you pass away and relieve your family of an unnecessary financial burden during an already difficult time.
Seniors should consider funeral insurance for the following reasons:
- The application process is fast and simple. Applications can be done over the phone or online.
- Little or no medical examinations. Most policies won't require you to undergo any medical examinations.
- Your choice of a cover amount. Choose a level of cover up to $30,000.
The actual cost of a funeral can come as quite an unpleasant surprise, partly due to it being a subject that most people don't want to think about. There can be a whole raft of expenses associated with a funeral, depending on how big it is and how elaborate you want it to be, some of which include:
- A cemetery plot, coffin, gravestone, hearse and funeral director, if you plan to be buried.
- A service, celebrant, urn and flowers if you plan to be cremated.
- Venue hire and catering if there is to be a wake.
- Newspaper notices, obituaries and a death certificate.
- The added costs of cultural and religious requirements.
When considering funeral insurance, you would probably need a cover amount of at least $4,000 to cover a basic cremation and anything up to $30,000 for a more elaborate service.
- Easy to apply. Funeral insurance can be obtained quickly and easily over the phone or online.
- No medical examinations*. Funeral insurance generally won't require you to submit a medical history or undergo a medical assessment for pre-existing conditions, making it easier for seniors to obtain. There are exceptions however which can be found below.
- Fast payout when you pass away. Your benefit is generally paid out to your dependents within two business days of your passing.
- Lump sum payment. A lump sum payment is made to cover your final expenses.
- Accidental death cover. You will receive payment of the full benefit if you die due to an accident in the first year of holding your policy.
- Terminal illness. If you are diagnosed with a terminal illness after the first year of holding your policy you will receive a payout.
*When will my health or age require me to undergo a medical examination?
Keep an eye out for these policy features being offered when you are comparing funeral insurance. While some are beneficial no matter what your age others are of particular use if you are a senior.
Key features for seniors
How does this help me?
|Policies will sometimes offer you a choice of levelled or stepped premiums. A levelled premium doesn't rise as you get older which can be useful as your income ceases with age.|
|Cover becomes free once your premiums paid match your insured amount or when you reach 90 years of age.|
|This ensures you are paid out the greater between your total premiums paid and your sum insured.|
|If you cannot make premium payments, some policies offer a grace period (usually three months) to reinstate your policy. During this period your accidental death cover remains in place.|
Other useful features
How does this help me?
|Your policy covers you 24/7 anywhere in the world.|
|Some policies will also provide you with a free will kit to help with your estate planning.|
Age restrictions usually apply when it comes to funeral insurance. The normal age range for eligibility is 45 to 70, but the maximum age varies between insurers and plans do exist that cater for older seniors, although medical assessment may be required. The age of 80 or above is typically when you may have trouble taking out a policy. Most insurers will either:
- Require you to take a medical examination.
- Not provide cover.
Although the funeral insurance industry has made efforts to curtail scams and prevent rip-offs, dodgy providers who prey on vulnerable seniors still exist. Most of the time this will be done through:
- Misleading day-time television advertising.
- Harassing cold calls over the phone.
- Door-to-door salespeople trying to pressure them into a sale.
What are the problems with these types of policies?
Here are some of the main issues with buying funeral insurance from a television commercial or a salesperson:
- Ads can make funeral insurance sound simple. A 30 second ad isn't enough time to explain a complex product like funeral insurance properly nor can it tailor a policy to your personal situation, which is a must with any form of insurance.
- You might be rushed or manipulated into buying a bad policy. Ads and salesman on the phone will focus on you getting you to buy a policy, rather than explaining it's pros and cons.
- Your rights may not be explained to you. A salesperson must tell you how long your cooling off period is. If they refuse to or give vague responses then do not buy from them.
How do I avoid getting sold a bad funeral insurance policy?
Most providers who sell bad or dodgy policies rely on people not fully understanding what their getting sold. Therefore, to avoid getting ripped you should try to:
- Understand the features that will be included in a good policy.
- Know the funeral insurance traps and tricks, some of which are explained below.
- Consult with an experienced and reputable advisor in the event you are still unsure about a policy.
How to avoid it
Other ways to cover your funeral expenses include:
- Life insurance. This usually contains a funeral expenses benefit.
- Superannuation. This also often contains funeral cover, although the payment process is slower than that of standalone funeral insurance.
- Savings. Either a lump sum term deposit or regular payments into a savings account.
- Funeral bond. Money invested by an insurance company or friendly society is used to cover your funeral expenses.
- Prepaid funeral. Either a lump sum or regular payments to a funeral director.
- Government assistance. If you are a veteran or pensioner, you may be eligible for financial assistance to help cover funeral expenses.