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We will discuss the usefulness of funeral insurance and compare it to preplanning.

Funeral insurance is designed to cover the cost of your funeral. A health check is not needed to take out a policy with most insurance companies.

Things to look out for with insurance:

  • You may end up paying more in premiums than your funeral insurance is worth.
  • Insurance premiums can rise exponentially with age and can be overwhelming, especially if you have a fixed income.
  • If you stop paying premiums, you will lose coverage and, in most cases, will not receive a refund. In 2014, 16.5% of policies were surrendered, of which one-third were surrendered by insurers for non-payment of premiums.
  • A prepaid funeral, death benefit, life insurance, or simple savings account is often better.


Pre-paying or arranging funerals:

The pre-arranging or paying option is a better choice, and covers all or part of your funeral, usually at today’s prices. The services you pay for are covered when you die, regardless of how much they cost at the time. You can also arrange for urns, interstate transfers, and more by prearranging with a funeral director.

There are a few ways to fund pre arrangements.

Pre-purchased products:

You may wish to purchase a spot in the cemetery grounds, wall niches, or memorial gardens. Most cemeteries sell tomb and alcove walls in advance, and this is done automatically by contacting the desired cemetery. This is a good investment. Please ensure that you have kept all records and communicated the information to your designated funeral director or executor.

Pre-paid funeral plans:

Choose the type of funeral you want and pay in full. Alternatively, pay a deposit and pay in instalments over a period of time. We also use Funeral Plan Management for this type of fund and have found it to be one of the best funds in Australia. They typically release funds within eight hours of a claim. They also have an excellent refund policy if you decide to cancel the policy. Be careful using other funds and read the PDS for refund and withdrawal policies.