As we go about our daily lives there are enough bills and expenses to keep us busy that we don’t usually have any energy to think about what would happen after we died – we’re too busy just getting through our life to worry about our death. However, while you may be able to let go of all of the daily financial struggles after your death, do you really want to leave those financial struggles to your family or friends who are left behind?

How can funeral protection protect you and your family?

Funeral protection is something most people will avoid talking about or organising because they feel they are tempting fate. However, once you do organise coverage you won’t every have to think about it again, and your family can have peace of mind that they’ll be able to give you the send off your deserve when the time comes – because after all, it’s not a matter of if, it’s a matter of when, because we’re all going to die someday.

Which means we should all consider funeral protection because funerals can be expensive and in the 15, 20, 25 years or more until you die, they’re not going to get any cheaper, in fact just the opposite will happen, they’ll become more expensive. Funeral protection insurance is designed to pay a cash benefit to your family when you die, so they can pay for all of the funeral costs. This amount is usually between $3,000 and $15,000 depending on your level of cover.

You can usually also be guaranteed acceptance if you are between 18 and 70 years old, and haven’t been denied cover by a life insurance company because of your health. Funeral protection insurance can be taken out as a standalone policy, or coupled with an accidental serious injury insurance policy which will pay an additional lump sum benefit if you suffer an eligible injury caused by an accident. You can then know that no matter what happens in the future, you won’t be a burden on your family.

How much funeral protection insurance do you need, and what will that cost?

The amount of funeral protection insurance you can take out is not unlimited and most insurers will offer up to around $15,000. That benefit amount can be increased if you die from an accident as some insurers will up to triple the benefit amount. It is also important to remember that you may only be covered for an accidental death in the first 12 months of taking out your policy, but after 12 months your family will receive a benefit for death of any cause.

Funeral protection insurance is an additional expense in your budget, but it has been designed to be affordable. The premiums payable are based on the amount of cover you choose, your age or the age of the oldest insured person on the policy, and your gender so you can tailor a package which suits you now and will protect you in the future.

Features of Funeral Protection Insurance

When you take out a funeral protection policy you can choose a single or a family option. The family option will allow you to cover yourself, your partner and any children you have who are under 21 years old and are dependent on you.

Another addition you may want to consider with your funeral protection is accidental serious injury insurance. This insurance will pay a benefit which is triple the benefit amount you selected and includes injuries such as quadriplegia, paraplegia, blindness, deafness and the total and permanent loss of use of two limbs.

It is also beneficial to take out funeral protection as soon as you can because once you are insured you can keep the policy for life, and as long as your premium payments don’t lapse you will be covered.

When it comes to the benefit amounts and payout you will want to consider the following features:

• Policy discounts. Some insurers will offer you a discount on your premiums if you take out a certain amount of cover. For example, a funeral protection insurance policy with a benefit amount of more than $20,000 may receive a 10% discount on premiums. You may also be able to negotiate a discount on your policy if you have multiple policies with the same insurer.
• Premium waiver. You know that insurance premiums must be paid for the insurance to remain current, but many funeral protection policies will cease charging premiums when the oldest person on the policy reaches 90 years of age.
• Automatic increases. The cost of everything goes up, year after year and the chances are good that the amount of benefit you choose now will buy less in the future when your beneficiaries make a claim to pay for your funeral. Therefore, to ensure that your funeral protection benefit retains its value, a funeral protection plan can include an automatic increase every year, usually of 5% to keep up with inflation. This increase will occur every year on the anniversary of the day your policy became active, and will continue to increase even after the maximum benefit amount has been reached or exceeded.
• Accidental pay out only. In most cases your funeral insurance will only pay out in the first 12 months if your death is the result of an accident. This 12 month waiting period will also apply to any increase you’ve made in the coverage amount, and if your policy has lapsed and been reinstated.
• Coverage period. Your cover will start from the date your application is accepted by the insurer, which may be different to the date you pay your first premium as you can often choose which date you want to pay your premium on each month. A funeral protection plan ceases coverage when a death claim is made, for a dependent child who reaches the age of 21, if you cancel the policy or fail to pay your premiums, or if your insurer cancels the policy.
• Benefit pay out. The funeral protection benefit will be paid to your family or beneficiaries in a lump sum amount in the event your death is eligible for a pay out.

Conditions of a Funeral Protection Plan

Funeral protection insurance is not a product you are ever going to use, but it is one which your family are going to rely on after you’re gone. However, while you’re still here you can make sure you’ve made the right decision in your policy choice by taking advantage of the 30 day money back guarantee. This will give you time to make sure you are happy with the policy and all of its conditions, and do any checks you want to on the insurer, as well as assess their customers service. If you choose you can cancel a policy within the 30 day period as long as there has been no claim made, and continue comparing policies which are right for you.

Some of the conditions you will want to check for in your funeral protection insurance include:

• Changes to premiums. You should be able to lock in a premium amount which won’t change over the term of the policy. If premiums do increase it will be a change across the board on all of the insurance company’s funeral protection plans as their cost of doing business increases. You will be notified in writing of any changes 90 days before the change is made.
• Paying the premiums. Your premium amount will be deducted from your account on a date of your choice. You can make your premium payments fortnightly, monthly or yearly. The payment can be made directly from your bank account or your credit card account. You can apply at any time to make a change to the method of payment, but any changes to the frequency of payments will not come into effect until the next policy anniversary.
• Change of policy. During any time within your policy term you can apply in writing to decrease or increase the insurance amount, or to change from a single plan to a family plan or vice versa.
• Cancelling the policy. If you miss a premium payment and that payment remains unpaid for more than a month your policy can be cancelled.
• Replacement policy. If you are applying for a new funeral protection policy to replace existing coverage you need to make sure you compare all of the benefits carefully before you switch to make sure you are moving to a policy with adequate and comparable cover. Also make sure there are no waiting periods with the change, and whether waiting periods already served with an existing insurer are recognised by the new insurer.
• Nominating beneficiaries. When a claim is made it is paid to the policy holder, however if you die the payment will be made to your legal representative. You can also nominate beneficiaries to receive the funeral benefit payment amount upon your death by contacting your insurer in writing. When nominating beneficiaries there are some conditions to remember: there cannot be more than five nominees; nominees must be a natural person not a company or trust; you can change the nominees at any time by applying in writing and the benefit payment will be made to the most recent nominee form provided; if the nominee is a minor when the benefit needs to be paid, the amount will be paid to the nominee’s legal guardian; if a nominee has died before you, the benefit pay out will go to your legal representative for distribution.
• Continuation of a partner’s policy. If you die but you are survived by your partner who is on the same policy as you, they will continue to receive coverage under a new policy for themselves, with the same benefit amount.
• To claim a benefit. When you die your legal representative will have to notify your insurer and provide a completed form from your doctor or specialist – this is to be completed at the expense of your estate. The claim should be made as soon as possible after death and proof of death must be supported by at least one medical practitioner, plus any laboratory reports or tests. If a claim is made more than 120 days after death, the benefit may not be paid.
• Tax implications. In most cases the premiums for your funeral protection insurance won’t be tax deductible, however, any benefit paid from the policy won’t be taxed either.

How to Apply

If you are an Australian resident and you are between 18 and 79 years old your acceptance into a funeral protection insurance policy is guaranteed with most insurers. You can often even apply for cover over the phone or internet without answering any medical questions, and you will be covered right away. You can also apply for cover for your financially dependent children, who must be under 21 years old, and be Australian residents.

You may have thought about your funeral or you may not have, but even if you’ve only thought about your death to the extent of wanting your friends and family to celebrate your life, rather than mourn your death, make sure that the celebration can be organised as easily as possible and that remembering you isn’t a financial burden for your loved ones.