Funeral Insurance – Simple, low-cost cover for your final expense

Rates and Fees verified correct on April 22nd, 2015

Compare funeral insurance policies and get affordable cover with no medical exams

Funeral Insurance provides a lump-sum payment to your dependents in the event of your death to cover the cost of your funeral. This payment can come as great relief in this difficult time as it ensures your family can pay for the funeral service they want. While every case is different, funerals in Australia generally cost between $4,000 and $15,000.

  • Most policies will allow applicants to take out up to $30,000 in cover and premium payments will usually cease at age 90
  • In comparison to most other forms of personal insurance, there are no medical or blood tests required and cover can be put in place over the phone
  • Some policies will now cap your premiums once you have paid the same in premiums as your sum-insured...so you will never pay more for than what you are covered for

Not sure if funeral insurance is right for you? Read on to find out how it actually works and what alternatives there are. If you are ready to receive a quote and purchase cover, simply enter your details in the form below and a consultant will help you find the most suitable option.

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Date of Birth
Sum Insured
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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Provider Insurance Type Product Name Product Details Apply
Final Expenses Cover Freedom Final Expenses Cover Pay nothing for the first year of cover and choose between stepped and level premiums. Get Quote
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How does funeral insurance work? What does the policy provide?

Funeral insurance can be tailored to provide increased flexibility to you and your dependents. The table below lists a range of features to consider when comparing plans.

Similar to the feature above, some policies won't increase your premium over time so you can track exactly what you are spending on your cover.

Premiums capped at sum-insured
This is perhaps the most important feature to look out for when comparing policies and ensures that your premiums will stop once they match level of cover you have taken out. Not all policies will offer this option.
Premiums do not increase with age
Some policies will now not increase the premium as your age increases.
Range of levels of cover
You can generally insure yourself from anywhere between $5,000 and $30,000.
A family member can be the beneficiary of the policy
If you name a family member as the beneficiary of your policy, they receive the benefit payout in the event of your death, and they can easily use that money to plan and pay for your funeral.
Standalone or included funeral benefits policy
You can either take out a standalone funeral protection insurance policy, or you can have a life insurance policy that has concessions to pay for your funeral from the benefit payout.
Continuation of cover
Policyholders generally stop paying premiums at 90 years of age, after which the cover continues for life.
Medical underwriting is not needed during application
You do not usually have to undergo medical exams in order to receive cover, which is often the case for life and income protection insurance.
Graded benefit
With a policy offering a graded benefit, the amount of coverage increases over time. The amount of the increase and the frequency of the increase differs between providers.
24 Hours Worldwide Coverage
Most policies provide cover 24 hours a day, seven days a week, worldwide.
Guaranteed Renewable
If you maintain policy payments and other obligations, policies are rarely be cancelled by providers.
Accidental Death within first 12 months
Some funeral insurance policies only provide cover in the first 12 months for deaths that are the result of an accident.
Refund for death within first 12 months
If insured dies within the first 12 months and death is not due to accident or self-inflicted injury, most refund all premiums payments to date.
Cooling off period
Most policies come with a 30-45 day cooling off period so you can be sure you have found the right cover.

The table below shows a standard structure for funeral insurance benefit payments

Cause of Death First 12 Months After 12 Months
Accident Benefit Amount Paid Three Times Benefit Amount Paid
Suicide No Benefit Paid Benefit Amount Paid
Self Inflicted No Benefit Paid Benefit Amount Paid
Sickness Refund of Premiums Paid Benefit Amount Paid
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Additional features you may want to consider

When you take out a funeral protection policy you can choose a single or a family option. The family option allows you to cover both you and your partner. A separate policy can be taken out for any dependent children under 21 years of age.

It's important to consider:

  • Policy discounts. Some insurers offer a discount on 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. Many policies cease premiums payments when the oldest person on the policy reaches 90, after which the policyholder remains cover at no additional cost.
  • Automatic increases. To ensure that your benefit retains its value, a funeral protection plan can include an automatic increase every year, usually of 5% to keep up with inflation.
  • Coverage period. Your cover starts from the date your application is accepted by the insurer, which may be different to the date you pay your first premium. Funeral insurance ends when a death claim is made, a dependent child reaches the age of 21 or the policy is cancelled or lapses.
  • Benefit pay out. The benefit is paid to your family or beneficiaries in a lump sum amount after an insured event.

Dale Maroney on Why it is Important to Prepare for Your Funeral Early

Terms and conditions to be aware of

  • It is 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.
  • Most providers do not provide payment if death is due to a self-inflicted cause within the first 12 months of the policy.
  • Benefit may not be paid if death is caused by suicide within the first period of the policy being taken out.

 

Funeral insurance traps you need to be aware of

1. Paying more in premiums than the cost of your cover:

The biggest trap to be aware is paying much more in premiums than your would actually cost. If your cover remains in force longer than expected and your premiums increase with age, you could end up paying for your funeral in premiums and some.

How do I avoid this?

There are now policies available that will cap your premiums once they amount to the same as your sum-insured and where the price does not increase with age. Also, take the time to determine an appropriate level of cover to take out to cover your insurance needs.

2. Going straight to the cheapest policy

Nobody wants to overpay for insurance but choosing the cheapest policy may lead to you ending up severely underinsured. So when comparing quotes, make sure your policy still offers the following features;

  • Premium cap
  • Guaranteed acceptance
  • Cooling off period
  • Cover for accidental death in firs year
  • 24/7 worldwide cover
  • Range of cover
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How much does a funeral actually cost?

While every case is different, funerals in Australia typically cost between $4,000 and $15,000. Prices will vary greatly depending on the fees of the cemetery or crematorium. According to legalanswers.sl.nsw.gov.au, single graves can cost between $2970 to $4800, with an additional opening fee of $1485.

Typical cost's associated with a funeral include;

  • A casket or urn
  • Cremation or embalming
  • A burial vault or grave line.
  • A gravestone
  • Flowers
  • Hearse and other limousines for close family
  • Costs to dig and fill the gravesite
  • The purchase of the burial plot

The cost of the funeral is obviously going to be impacted by your own situation and community group. This article from finder.com.au insurance publisher Claude provides a breakdown of the costs of traditional Chinese funeral for her grandfather.

What is the cost of a cremation in Australia?

Again costs will vary depending on the crematorium though typically, an unattended cremation will cost between $1,200 and $1,500. A cremation with chapel service will generally cost between $4,000 and $5,000.

Please note that these figures should only be viewed as a rough guide and finder.com.au recommends you carry out your own research into the cost of a funeral prior to purchasing cover.

How much can I be covered for?

The amount of cover you can take out is not unlimited and most insurers will offer from $5,000 up to around $30,000 in $1,000 increments. That benefit amount can be increased if you die from an accident as with some insurers tripling the benefit received after 12 months.

It is important to consider what costs would need to be covered if you were to pass away to help you determine an adequate cover amount.

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 that suits you now and will protect you in the future.

 

How much does funeral insurance cost?

The cost of cover will vary depending on the following factors

  • The age of the life insured
  • Whether or not the insured smokes
  • The benefit applied for, including benefit indexation
  • The gender of the insured
  • Any policy discounts that are applicable to the policy
  • Any additional features

 

Is funeral insurance tax deductible in Australia?

  • Generally premiums paid are not tax deductible
  • Any additional benefits are generally not assessed for income tax purposes
  • The premium rates provided are generally inclusive of all premium charges
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Funeral insurance terms and conditions

Like any type of insurance, its crucial to be aware of the policy conditions before applying. Here are some to look out for when looking at funeral cover

  • Changes to premiums: Premiums are generally stepped and increase over the life of the policy.
  • Paying the premiums: Your premium amount is 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.
  • Changes to the 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 60 days 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 the benefits carefully before you switch. 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 paid, it is paid to the policyholder. However in the event of your death, the payment is made to your estate. You can nominate beneficiaries to receive the funeral benefit payment amount upon your death. 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 and are survived by your partner who is on the same policy, your partner will continue to receive cover under a new policy 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.

Most policies will not allow you to claim back the money paid in premium payments if you decide to cancel the policy. If the policy is cancelled, they will not receive any payment and cover will cease to continue.

When does funeral insurance end?

  • When the funeral benefit is paid
  • In the event that there is no payment of premium within a specified period of its due date
  • If written notification canceling the policy has been received by the provider
  • Upon your death where the benefit is not payable

How do I make a funeral insurance claim?

Checklist for paperwork required for funeral cover claim

  • Death certificate
  • Original policy document and policy schedule from when cover was first taken out
  • Completed claim form.

Claims should be made as soon as possible after the insured has passed away. Insurance companies may refuse to pay the sum insured if there is insufficient evidence of the insured's death.

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What are the Requirements to Apply for Funeral Insurance in Australia?

You can apply for funeral insurance if you are an Australian resident between 17 and 80 years of age. Most policies generally offer guaranteed acceptance, so you will be automatically accepted when you apply for cover.

Can I apply for joint funeral insurance?

In most cases, policyholders can take out coverage to include their spouse/partner. They can also cover their relatives.

How to apply for funeral protection

If you are an Australian resident and you are between 17 and 80 years old your acceptance into a 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.

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Is there another option more suitable to you than funeral insurance?

Funeral Insurance is certainly not the right option for everyone. It is critical for anyone considering this option to have a clear understanding of what they will pay in premiums over the course of their policy and to ensure that this does not exceed what the overall cost of their funeral. Some alternatives to funeral insurance include:

1. Pre-paid funerals

One alternative is to pay for all or part of your funeral in advance so that the money is already there in the event of your death. One thing to remember with this option is to be aware of how prices may rise over the years prior to your death. Some of the ways to pre-pay your funeral include;

  • Make regular contributions over time with a funeral company/director
  • Purchase a funeral lot outright from the funeral parlour
  • Take out a funeral plan with a funeral company and paid in fixed installments over a defined period. If you are considering this option make sure you know the conditions that are in place in regards to canceling your policy...some may not refund previous payments

Pre-paid funerals may be more cost-effective if you live for another 5-10 years but it is worth noting that some plans may be inflexible if you wish to cancel the plan to move away.

 

2. Put funds aside in a savings account

It might be a better option to set up a dedicated high-interest savings account to hold funds for your funeral. A low fee, high interest account could be a secure option to lock away a pre-determined amount and let it accumulate interest.

Use the finder.com.au savings goal calculator to help determine what you could save over a certain time

3. Life Insurance

Another alternative to taking out funeral insurance is to have a life cover plan in place. Life insurance will pay a lump sum benefit in the event of your death or terminal illness.

Funeral advancement benefit

Most life insurance policies will offer a Funeral Advancement Benefit as a built-in feature on the policy. This provides an advance benefit (usually between $15,000-$20,000) to your beneficiaries upon presenting proof your death.

When will it be paid?

The advancement benefit will usually be paid immediately after the life insurance company has received the necessary documentation. The full life insurance benefit can take a couple of weeks to be paid in full.

 

4. Money from your Super

In the event of your death, your super fund will pay out any funds and life insurance cover that you accumulated in your superannuation fund. Some funds will let you have an "early release" of your funds to put aside to cover your funeral if you have suffered a terminal illness.

It's worth noting that there may be a delay in the funds being released so your dependents may need to cover the cost of your funeral initially and then be reimbursed at a later date.

5. Funeral bonds

Funeral bonds require you to make a lump-sum payment or pay by installment which is then invested and then withdrawn when you pass away. The funds from the bond cannot be withdrawn for any other reason than for the purpose of your funeral.

You can invest in a funeral bond directly with a friendly society or insurance company. Alternatively, you can take out a bond from a funeral director.

Benefits Drawbacks
  • Funds will generally increase overtime as it is an investment
  • If you go through an insurance company or friendly society, you are not locked in to using one specific funeral director
  • Can choose to buy bond in one transaction or to make regular payments over-time
  • Funeral bonds are exempt from asset and income test
  • There is the potential that the investment returns on your bond do not keep pace with the rate of inflation overtime
  • If you have paid in instalments and pass away earlier than expected, you will only receive what has been already been deposited
  • If you choose to cancel the bond, you may not be able to receive the funds back. Check the terms and conditions in the PDS prior to taking out the bond

Some final questions you might have

If you still need a bit more information to help you understand and compare funeral protection, your questions are answered here:

Why do you need funeral protection?

  • Having funeral cover means that you don't have to burden your family with the costs and the worry of your funeral when you die.

How does funeral protection work?

  • As an applicant you can choose the cover amount you want, and a lump sum benefit amount is paid to the beneficiaries of the policy when you die, to cover your final expenses.

How much funeral protection is enough?

  • The average cost of a funeral can be between $3,000 and $15,000 and your benefit will need to pay for the funeral director, casket, transport, burial plot, flowers and any other extras.

When is funeral protection active?

  • The coverage from your policy is active from the time your application is approved by the insurer. In most cases you will only be covered for accidental death in the first 12 months.

Is funeral protection valid outside of Australia?

  • In most cases funeral insurance will still pay a benefit amount to pay for your funeral expenses if you die while travelling overseas. However, keep in mind that this generally won't include expenses for transporting your body home.

How are funeral protection premiums calculated?

  • The insurer will assess your risk factors before approving your insurance and calculating your premiums, and the biggest factor affecting your premiums is one you can't change – your age – so it can be beneficial to take out cover sooner rather than later.

What do you get back if you cancel funeral protection?

  • Most insurers will have a cooling off period during which you can cancel your policy without incurring any costs. If you cancel your policy after the cooling off period you will only be refunded the unused portion of your premiums, for example if you pay your premiums yearly and cancel in the middle of the year.

Can you insure your whole family?

  • Most insurers will allow you to take out a joint policy for your partner. A separate policy can be taken out for dependent children under the age of 21.

Are there any exclusions with funeral protection?

  • Exclusions will vary between policies and insurers, and a common exclusion is that you will only be covered for accidental death in the first 12 months, and covered for any cause of death after 12 months.

Is the funeral protection benefit amount taxed?

  • No, the benefit amount paid out upon your death is generally tax free, although you may benefit from seeking tax advice on your personal circumstances from your own adviser.

How can the level of funeral protection be increased?

  • You can apply to increase your coverage amount at any time, as long as the benefit amount you choose is within the range offered by the insurer.

Funerals are held as a way to celebrate life and remember a loved one who has passed away, while providing a point of closure for family and friends. Therefore, when you die, you want to make sure you are remembered the way you were, and your family and friends are allowed to grieve you, instead of being grieved by the stress and financial pressure of having to pay for your funeral. No matter how big or small your funeral is, there are always final expenses to be paid, and funeral protection insurance allows you to give your loved ones one more helping hand.

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