Real Insurance (Real), one of the major providers of funeral insurance in Australia, has enhanced and relaunched its funeral insurance product, which now freezes premium increases at age 80.
This coincides with a review of funeral insurance advertising by ASIC which sought greater clarity industry-wide in funeral insurance product promotion.
Said John Roche, general manager of Hollard Financial Services, the distributor of the Real Insurance funeral insurance product: “We worked closely with ASIC to ensure that Real’s funeral insurance advertising was in line with their recommendations. This focused on three key areas: greater disclosure around the nature of premiums; making imagery consistent with the price points being discussed; and the disclosure of risk with regards refunds if policies are cancelled.
"We saw this as a great opportunity to review the product as a whole. This resulted in reduced premiums across most age ranges, particularly for those aged between 70 and 80 and freezing increases to premiums once a policyholder reaches 80. These changes not only apply to new policy holders but also to current policy holders.
"In addition we renamed our product to reflect the fact that the benefit can be used to cover more than just funeral costs when someone passes away. Irrespective of what the funeral actually costs, any amount left over can be used against additional expenses for things like utility bills, medical costs and credit card debt. To reflect this, the policy has been renamed Real Final Expenses Cover.
"On being accepted, policy holders now have the option of a fixed rate or an age-based rate which means they can choose a policy where the premium rate increases with age up to 80 at which stage the rates are frozen or one where the premium rate stays the same for the entire life of the policy."
ASIC Commissioner, Peter Kell, welcomed the changes: "ASIC welcomes the additional changes Hollard Financial Services is making to their product, which should result in direct financial benefits for current and future customers."