Do I Need Funeral Insurance?
You might notice that there are several advertisements stating that you would need funeral insurance. If you have gone through any of these ads, you might feel that is the only way you can protect your interests financially. However, is this necessary? Do you really need to get funeral insurance? Here we look at what is involved and whether you really require it
What Is Covered In Funeral Insurance?
When you opt for funeral insurance, you can choose how much cover you want and pay a fortnightly or monthly premium. After your death, your beneficiary will get a lump sum amount to pay for the funeral services. Funeral insurance can prove to be expensive over the long-term. So depending on what your age is, you might end up paying a massive amount in premium compared to the funeral insurance cover. Here are some aspects to keep in view
Advantages of Funeral insurance
- Funeral insurance is a good option for individuals above 50 years of age without life insurance
- If you are below the age of 50, you would have very little need for funeral insurance because you would probably have a good life insurance cover. On the super fund or personally the life insurance would cover a death benefit, which will give your family a certain amount to cover the funeral expenses after your death.
- If you have a medical condition, funeral insurance can be advantageous. Most companies that provide funeral insurance would also give immediate cover with zero exclusions. But you would have to read the terms and conditions to determine whether there is a waiting period.
- Funeral insurance is a good option if you are unemployed.
Disadvantages of Funeral Insurance
- The premiums will increase over time and as you age, you might not be able to afford them. If you stop paying them, you would not have any cover and will not receive the refund either.
- As mentioned earlier, sometimes the premium costs can be up to four times the cost of a standard funeral.
- There is typically a waiting period for you to receive the cover in case of death by illness
- Many companies do not give the insurance payouts immediately, which means your family would still have to fork out the money for the Funeral services upfront while conducting them.
Making the Right Decision
If you are wondering whether funeral insurance is a good option for you, you would have to consider these advantages and disadvantages and discuss your options with family members. You can also find out what prepaid funerals offer as well as what high interest savings accounts and funeral bonds would be a better option financially.
Shop around a bit and compare quotes from multiple companies before making your final decision. You can also check with funeral homes about their pre-paid funeral services. Discuss these options with our experienced funeral director at Paul Lahoods Funerals at 02 9564 0223. Feel free to send us your queries via this contact us form.