A guide to funeral plans for pensioners
When selecting funeral cover, it is vital that you ensure you pick an insurance company that is trustworthy and dependable. The whole point of buying the insurance is that your loved ones aren’t overly burdened by your passing – so you can enjoy your life with that peace of mind.
This short guide has been created with the purpose to answer the most commonly asked queries with regards to funeral plans for pensioners.
What is funeral insurance for seniors?
Funeral insurance is a type of insurance policy that is designed to protect your loved ones from having to pay for the expenses of your funeral and/or any outstanding dues you may have at the time of your death.
You pay for the seniors insurance funeral in the form of premiums – these are paid normally every two weeks, every month or on an annual basis. You can also choose the exact amount of your cover – this is the money you want set aside to cover for your funeral and other final expenses, and your premiums will be valued according to this amount. When you pass away, your chosen beneficiary will get the benefit as a lump sum which is referred to as the ‘funeral benefit’.
Certain companies provide a value guarantee which means that you won’t have to pay more in premiums than what your loved ones get at the time of the claim. The insurance company either pays the chosen benefit amount, or the amount you’ve paid in premiums, which is larger.
Why is it a good idea to take out funeral insurance?
Even though your mind may not jump to the payment of your funeral cost when you think of the consequences of your demise, it will certainly have a very tangible effect on your loved ones, who are already reeling from the shock of having lost you. Funerals can cost over $15,000 as per Moneysmart.gov.au, depending on what you want.
It might be tough for your family to arrange such a hefty amount of money for your funeral at such prompt notice, and this is where the funeral insurance for pensioners that you took out during your lifetime will save the day. Your family members will have fast access to a lump amount of cash that they can use to take care of your final expenses.
Having a funeral insurance for parents plan taken out will give your parents the peace of mind that they will not be a burden on the family when the time comes.
How do prepaid funeral plans differ from funeral insurance?
Seniors funeral insurance Australia works in a way much like other insurance policies. You pick an amount of money that your policy will cover and periodically pay a series of premiums to cover for that amount.
The person you pick as the beneficiary will get the benefit sum in the event of your passing, which they can then use to handle your funeral and other final expenses.
Prepaid funeral plans, on the other hand, work by having you pay for your funeral in advance. You basically select what your funeral will incorporate, and you get a fixed cost according to your choices that you pay up in advance so your loved ones don’t have to pay a dime when its time.