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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.1 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. Your premiums increase every year

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 budget friendly, fair policies.

For example, instead of premiums rising every year with Real Funeral Insurance, premiums drop by five per cent every five years you hold the policy.* Instead of paying more, you end up saving the longer you have your policy.

4. Funeral insurance is too expensive

Depending on the policy or provider you choose, Funeral insurance may be expensive. However, there are providers such as Real Insurance whose Funeral Insurance product, Flexi Plus ensures you’ll never pay more in premiums than the total funeral insurance benefit that’s paid to your family.** Your policy may also come with complimentary extra cover, such as cash benefits for accidental serious injury. If you go with a reputable provider, you may get bonus payments, such as Real Funeral Insurance 10 per cent cash back for premiums paid during the first 12 months.

As with any product or service, finding the right provider and product for your needs is key. Instead of assuming funeral insurance is too expensive, take time to explore what’s available and you can end up with a budget friendly policy.

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 or finalising your funeral insurance policy through a direct provider. In fact, you don’t need to provide the insurer with any details about your funeral.

8. You won’t be able to keep your cover after a certain age

Once you are insured, you won’t be prevented from keeping your cover only because you’ve reached a certain age. While terms and conditions can vary depending on the policy or provider, with Real Insurance you’ll be able to keep your cover for life as long as you have continued to pay your premiums and haven’t cancelled your policy before a specified age. However, it’s important to note that insurers will have eligibility criteria for people signing up for funeral insurance. For example, you may need to be age between 18 and 79 to be eligible.

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. Choose a policy that has premiums that reduce over time, and won’t have you paying more than the benefit amount. 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 never pay more than the benefit amount, and you’ll have peace of mind knowing your family won’t be facing financial stress during a time of grief.

Real Insurance offers transparent, affordable Funeral Insurance for Australians. Request a quick quote online.


References

  1. Paying for your funeralASIC‘s MoneySmart

Disclaimers

* If you change your cover your premium will be affected.

** If your policy is cancelled prior to age 85, no benefit is payable. There is no premium refund after the cooling off period.

This is general information only and does not take into account your personal objectives, financial situation or needs. You should consider the relevant PDS available on this website prior to purchasing any product.

Real Insurance is an award-winning provider of funeral insurance.

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