Are you searching for a funeral policy but haven’t the slightest idea where to begin? All those websites offering funeral insurance quotes online got your head spinning? Read on to discover what to look out for in a funeral policy and the various intricacies of funeral policies.
No-one likes to dwell too much on the last chapter of their time on earth, let alone begin to make arrangements for their own funeral whilst they are still walking on earth!
You might think of death insurance as an unnecessary activity to ponder over something that won’t be a reality for many years to come but, then again, the future cannot be predicted with 100% surety.
It is better to be prepared regardless of your age, so that your loved ones are guarded against any financial hardship they might suffer if the worst were to happen to you.
What follows is a funeral insurance comparison with life cover so you can decide which one is better for you:
Life cover or funeral insurance: which one to go for?
There are two major insurance solutions which can cover for your funeral costs:
A protection plan such as this one has considerable benefits towards covering those dependent on you in the event of your demise. It is recommended when you have lots of financial obligations – you’re basically allocating some funds to cover for the immediate expenses after your death, for instance legal fees and funeral costs, in short, life cover will include insurance for funeral expenses, among other things.
If you are ineligible to apply for life cover because of your profession, health, age or pastime, you might want to go for funeral insurance which will also give financial protection to your kin at the time of your death.
The underwriting procedure for most funeral insurance plans is very simple – it doesn’t compel you to have funeral insurance underwriters make a medical underwriting for you. Besides the standard funeral insurance, there is a variation known as prepaid funeral insurance that could be even more convenient for some.
Why go for a funeral protection insurance policy?
Funeral insurance, in the event of your passing, leaves your chosen beneficiaries with a lump sum that they can utilise to cover for your funeral costs. This is especially beneficial for those who are ineligible for life cover policies.
An affordable funeral insurance will also allow your family to arrange your funeral without stressing over the cost, which will be a blessing at the time when they are already in pain over losing a loved one.
Accidental cover is normally applicable within one or two years of purchasing the policy (and you may even be covered from day one!). The beneficiaries you’ve nominated might get twice or thrice that of the cover amount, but this is dependent on the insurer you go for.
How much funeral cover is enough for me?
Most of us might not be remotely aware of the costs that go towards arranging a funeral, so it isn’t surprising to be shocked when you get the funeral insurance online quote after each necessary expense has been accounted for.
The cost of putting together a decent funeral can be considerably high, and will vary as per the needs of your family and loved ones. Normally, it goes between $4,000 and $15,000, as you’ll see when you compare funeral insurance policies. But why is there such a huge variation?
Why do funeral insurance costs vary so much?
Funeral costs frequently vary so much as a result of the various requirements you or your family might have. Particulars such as ethnicity, cultural background and religion will normally affect how your funeral is carried out exactly, which will then contribute to the overall cost of your funeral.
There are several items (chosen either by yourself or your family) which will combine to give the total cost of your funeral arrangement. The most important ones are as follows:
- Cremation or burial
- Casket or coffin
- Fees of the funeral director
- A grave marker
- A burial plot
- Death certificate
- Notices in the newspaper
- Miscellaneous costs, such as a wake held in your memory, that will include a venue, food, drinks, celebrant services and so on.
To ascertain the amount of cover you’ll need from your funeral plan insurance, it is crucial to begin planning out your funeral early on so you have a better idea of the expenses that will be involved.
For instance, give serious thought to whether you’ll prefer to be cremated or buried. This is one of the first things you should consider since there is a significant difference in the overall cost if you go for one or the other.
According to Dale Maroney, CEO of Walter Carter Funerals, burial is considerably more expensive than cremation since it requires the purchase of land for the burial plot (if the family doesn’t own one already), and the costs can vary depending on the location. For instance, purchasing a grave in the Eastern suburbs of Bondi will set you back by $15K to $20K upfront.
Give due consideration to these factors and refer to multiple funeral insurance Australia compare websites to find the best policy for yourself.
Which funeral insurance policy is the best?
The best funeral cover insurance ought to cover the funeral costs at correct amount as required by you, and at the right price itself. To ascertain the family funeral insurance which is best suited to your needs, you can take a number of steps that will facilitate your search efforts:
- Make arrangements for your funeral early on: Even though you might not want to think about something as morbid and daunting as your own funeral, careful planning done early on will prevent any financial hardship from falling on your family when the time does come, be it expected or unexpected. Documenting what you will need for your funeral will aid your family, especially when they are trying to deal with your loss and finding it hard to arrange for your funeral as well. Your documented requirements will give the explicit directions as to your wishes regarding the funeral. This will also aid you in aligning your requirements with the budget you have allocated for your funeral.
- Consult a funeral director: A funeral director will help you in arranging all the components necessary for your funeral and they’ll also give you an idea of how much the whole thing will cost you. A funeral director will cost you of course, with their fee consisting of two parts – firstly, the expenses related to their services e.g. the service itself, mortuary costs, casket/coffin sale, and secondly, disbursements i.e. expenses paid to other parties on behalf of your family e.g. a cemetery or crematorium, florists, clergymen, death certificate issuance and newspaper notices. Being aware of the potential overall cost of your funeral arrangement will help you pick the right amount of cover for your funeral. You can then compare various funeral plans being sold in the market and go for a policy with a price and features best suited to your requirements.
- Don’t consider only the price, but also assess the funeral cover’s benefits and features: With such a large number of funeral insurance policies present in the market, you might wonder which of these will be the best and cheapest for you. It is essential that you realise that the least expensive plan won’t always mean the most comprehensive coverage from the policy. Plans that cost less normally come with some restrictions that you’ll need to approach carefully. Be sure to peruse the Product Disclosure Statement (PDS) to gain an idea of the terms and conditions which merit a successful claim. It is vital that you compare the benefits and features of each policy, particularly if you want in-depth coverage. The Product Disclosure Statement will provide all the details you’ll need about the in-built features of the policy, as well as the fringe benefits you can avail for an extra cost.
Integrating these three steps into the search for the best funeral insurance policy will guide you in the right direction so that not only will the plan you select match your budget, but it will also meet all your needs for your funeral.
As a bonus tip, you might want to get some advice from a funeral home to get an idea about how to plan your funeral and the expenses which you might incur.
Features and benefits to look out for in your funeral insurance policy
The benefits and features provided by several different funeral plans in Australia will differ between providers as you’ll see if you compare funeral insurance Australia online, which you’ll definitely need to do if you want a funeral policy that matches your needs.
In order to get the best funeral cover insurance deal, that has all the requisite features, bear in mind the following factors:
- Coverage level options: Generally speaking, you can choose a funeral cover amount ranging from $5K to $30K, with $1,000 divisions in between.
- Guarantee of acceptance: If you are an Australian resident, you’re able to apply for the funeral cover without going through a medical exam.
- Guarantee of renewal: If you keep paying your premiums regularly and punctually, the policy will get renewed each year until the time of your death.
- Accidental death coverage: During the first 12 months of having purchased the policy, the majority of insurance providers will only pay the insured amount if it is an accidental death. Once the first 12 months are past, your specified beneficiaries will be eligible to twice or thrice the benefit amount if the death is by accident.
- Refund of premiums during the first twelve months: If your cause of death is anything other than an accident e.g. self-inflicted injury or illness, all premiums that you have paid under the policy will be refunded.
- Rate of premiums:
- Cap on premiums: Certain providers might have a feature where, once you have paid an amount of premiums equal to the cover amount, you don’t have to pay anymore. Other providers might fix the premium rates once you reach a set age, normally 85 to 90 years.
- Premiums freeze: Certain policies have benefits which let you freeze your premiums at a particular affordable level, but this will reduce the amount insured through the policy.
- Worldwide coverage: Your coverage policy will safeguard you 24/7 regardless of where in the world you are located.
- Cooling off time: Generally, insurance companies will have a cooling off period that ranges from 30 to 45 days (starting from the date your policy is effective). If you find the policy unsuitable for your needs during this time, you can cancel it and the insurance company will refund you the premiums paid so far.
Since there is a multitude of funeral plans at your disposal in Australia, be sure to carefully scan the PDS and if there is any doubt, seek the advice of an insurance expert, who can guide you in a professional manner.
Featured top notch funeral cover provider in Australia
With such a large number of funeral cover policies being marketed in Australia, it might not be easy to determine which one is the best for you. In order to give you an idea of what to expect from a good insurance policy, here is an example:
AIA Funeral Protection Insurance
AIA Australia has a wide range of insurance products on offer that promise to safeguard you at critical life events such as injury, illness or death. Through its affinity partner, xLife, AIA Australia now has life insurance funeral cover as part of its catalogue, with the following benefits and features:
- Benefit amount options: You can choose a funeral cover amount that ranges between $5K and $30K so you can have as expensive or as cheap funeral insurance as your pocket allows.
- Triple accidental death benefit: If your death is due to an accident, the insurance company will give your beneficiaries thrice the insured amount, given that the insurance policy is held for over 12 months.
- Family discount: You can enjoy a premium discount of 10 percent for two or more policies purchased where the policyholders share the same home address.
- Premium waiver of 3 months: When you apply for AIA funeral cover, the first three months are free – you don’t have to pay any premium during this time.
Tips for successfully comparing multiple insurance policies in Australia
It is essential to compare multiple policies from different insurance companies since it will allow you to find the right one to suite your needs and situation, without having to suffer an exorbitant price tag. This applies to both life and funeral insurance.
- Do your homework on various funeral plans being marketed: Even though the majority of funeral insurance plans will have a generally similar outlook, it is still vital that you go through the PDS to extract the full details about the policy in question. When comparing plans against each other, you’ll need to know the following things:
- Extra options and built-in features that come with the policy
- The structuring of the premium payments, will the premiums get raised with each year or will the payment stop after you have reached a predefined amount or age.
- Any discounts that come with the policy.
- The time it will take for your specified beneficiaries to get the payment for their claim.
- The terms and conditions of the policy – there are exclusions which could be applicable to your funeral cover. If you aren’t aware of these, your beneficiaries may be unable to avail the benefit amount when the time comes.
- Assess the reputation of the funeral insurance provider: Some time ago, there were only a few major financial institutions that provided insurance products to Australians. Fast forward to today and there is a multitude of small companies offering insurance policies. This raises the question of how you can tell if they are legitimate and will deliver on their promise when the claim is made. Here is how you can determine the credibility of the provider:
- Always perform a background check on the providers you are considering, since it will give you the details on their history, their market profile and their trustworthiness.
- Is the application process of the particular insurance provider straightforward and simple?
- Customer support offered when you’re applying and during the lifetime of the policy – is it readily available?
- Is the claims process straightforward?
- You should also go through testimonials and reviews made by previous and existing customers of the insurance provider to gain an insight into the kind of service they provide and whether there are any issues at the time the claim is made.
Steps for making a successful insurance claim
Besides funeral cover quotes, another essential element you need to compare for different funeral policies is their claims process. Funeral arrangements are normally made expeditiously at the time of death and the costs of these arrangements might have to be paid at one. It is therefore vital that your funeral fund is provided without hassle after you have made the claim. A well-documented claims process helps in this regard, since when the time comes, your beneficiaries will know exactly what to do in order to get the claim filed and serviced.
Follow the aforementioned steps to ensure a successful funeral claim:
- Tell the insurance provider to make them aware that you / your beneficiaries intend to make a claim. All premium payments will stop until the claim is processed accordingly.
- Inquire about whether you’ll be assigned a dedicated claims agent to handle your claims and guide you if you need help through the procedure.
- You’ll also have to submit the following documents while making the claim:
- A fully filled claim form.
- Attested copies of Death Certificate, Medical Attendant’s Certificate or any other documents that give evidence of death.
- Attested copies of the deceased’ passport or birth certificate.
- Attested copies of proof of identities as well as the claimant’s relationship with the deceased.
- Copies of all documents will have to be attested by the Justice of the Peace (JP).
Typical claims procedure for insurance-claim
As a reference, here’s how your burial life insurance claim is handled after you’ve filed it:
- You notify the insurance provider /advisor that you intend to file the claim: you can normally do this by emailing them or calling them. You’ll be sent forms and any other necessary documentation to complete for making the claim.
- You claim gets assessed: The insurance provider will than start the assessment of the claim. The assessment will be made based on the information you’ve submitted in the form of supporting documents e.g. certificate of death and medical reports.
You may be contacted by your dedicated claims assessor who might need some additional details. They will also inform you of the significance of the extra information they’re asking for in relation to the outcome of your claim.
- Your claim’s outcome: Certain claims may take longer to process owing to the complexity of their nature, but most are straightforward and you’ll be informed of the outcome within a few weeks. However, there is also the chance that the claim will get rejected, oftentimes because of an undisclosed preexisting health condition at the time the policy was bought.
As you can see, there is a lot more to finding the best funeral insurance policy for yourself than comparing funeral insurance quotes from an online catalogue. However, follow the advice we’ve provided and you’ll be able to find the right policy for yourself that will bring peace of mind to both yourself and your loved ones.