10 Funeral Insurance myths debunked
When it comes to funeral insurance, a few common myths seem to persist, perhaps because it concerns something we’d all prefer not to think about. Despite these misconceptions, funeral insurance can be a great way to help your family lay you to rest in the way you want. It can save them from financial stress in an already challenging time.
Consider these common myths whether you’re thinking about getting funeral insurance or wondering about the best type of product for your needs.
1. You don’t need it
One common misconception about funeral insurance is that you don’t need it. A funeral in Australia can cost anywhere from $4,000 to $15,000 or more depending on the type of funeral you want. Even if you have thousands of dollars saved up, that money may take some time to access, so your family and friends will need to come up with the money for immediate expenses like your funeral somehow.
When you consider how much even a modest funeral costs, the idea of funeral insurance becomes compelling. Having the funds safely locked away in your insurance policy means you can have your send off in the way you want.
2. Funeral insurance can be used for only funeral costs
It is not true that you can only use funeral insurance benefits for the costs of your funeral. Funeral Insurance can be used for anything you need. When it’s paid out as a lump sum, your family can use it to cover the costs of your funeral or use it to pay off any debts you may have.
3. It could become too expensive as you get older
If paying expensive premiums that increase every year is not your idea of a smart financial move, you’ll be happy to know not every insurance provider is the same. Do your research and find a reputable provider that takes pride in fair policies.
For example, with Real Funeral Cover*, if you choose to continue your policy past age 85 you won’t need to pay any further premiums, so you can enjoy ongoing peace of mind without worrying about the cost of your policy.
4. You won’t be covered for Terminal Illnesses
This is another (understandable) misconception that many people have about funeral insurance. Although some policies only cover death, there are also options which include extra cover for diagnosis of a Terminal Illness too. This is a standard inclusion after holding your policy for 12 months with Real Funeral Cover*, so you have even more peace of mind for life’s unexpected challenges.
5. It’s complicated to arrange
While sometimes insurance products can feel like they’re all about the complicated fine print, funeral insurance can be easy to arrange through a direct provider. You can set up your policy over the phone in minutes, and you usually won’t need medical or blood tests to be approved.
6. You need checks to get approved
Funeral insurance is considerably more straightforward than you may think. Obtaining funeral insurance through a direct provider usually doesn’t require medical or blood tests. Typically, you can finalise your policy online or over the phone, in minutes.
7. You need to plan your funeral when you get funeral insurance
You may think you need to lock in your funeral plans once you obtain your funeral insurance policy – this is not true. The way funeral insurance works is simple: as long as you’ve paid your premiums, your family will receive the specified benefit amount when you pass away, and they can plan your funeral from there. You don’t need to lock in the specifics of your funeral plan when applying for or finalising your funeral insurance policy through a direct provider. In fact, you usually don’t need to provide the insurer with any details about your funeral.
8. You may not get anything back from your policy
With Real Funeral Cover*, when you turn 85, you will have two options:
- you can end your policy and receive 75% of your Benefit Amount, or
- you can continue your cover at no further cost, and receive a 25% Bonus Cover increase.
If you decide to keep your policy past age 85, it will automatically expire when you turn 100 and you will be paid the Benefit Amount plus the 25% Bonus Cover amount. So by choosing Real Funeral Cover, you can ensure that your funeral insurance policy will provide you with a payout regardless of how things work out. Keep in mind if you choose the early cash out option, you’ll no longer be eligible to claim and you may receive less than you've paid in premiums to date.
9. It’s hard to make a claim
As long as you go with a reputable provider, the claims process is designed to be as stress free as possible for your family members. The insurer will be aware that it’s a challenging time for your family, and they will receive the payout amount as quickly as possible so they can plan and have everything done in a timely manner.
10. It’s too late for me to get funeral insurance
If you’re within the eligible age range, there’s no reason to think it’s too late for you to get a funeral insurance policy. Every little bit can help your family when the time comes, whether it’s a few thousand dollars or more.
Think of funeral insurance as a way to ensure your family can make final arrangements without added financial strain, and send you off the way you’d like. If you find the right policy you’ll have peace of mind knowing your family won’t be facing financial stress during a time of grief.
23 Jul 2018