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Broaching the topic of life and funeral insurance with loved ones

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Popular topics of conversation at a family barbeque aren’t likely to include mortality and finance, but like anything that could have a major impact on the quality of their family’s life, making the time to discuss funeral and life insurance options should be a high priority given the peace of mind being insured provides.

In fact, nine in 10 Australian parents (91.3%)agree that having life insurance eases the burden of a worried mind. After all, the certainty in knowing that the people who matter most will be financially protected and won’t be forced to deal with any unexpected financial load, could be of great comfort.

The people to talk to

Life and funeral insurance is an important topic, particularly when considering most families would be impacted financially if something where to happen to a loved one. For example, spouses who rely on their significant other’s income, dependent children, parents who may be supported by their own children or other close family members who might be affected financially by someone’s passing.

Life and funeral insurance is an important topic, particularly when considering most families would be impacted financially if something where to happen to a loved one. For example, spouses who rely on their significant other’s income, dependent children, parents who may be supported by their own children or other close family members who might be affected financially by someone’s passing.

When is the right time to talk?

There’s a common misconception that life and funeral insurance is only important for families or older Australians, and while taking out cover is certainly worth discussing for those groups, it can also be an important conversation to have for those who are young or single.

Consider, for instance, the financial impact many Australians would suffer as a result of an injury, sickness or accident that prohibited them from working – afflictions that could happen to anyone, irrespective of age or family status. Fortunately, total and permanent disability (TPD) cover is available in conjunction with life insurance, or income protection insurance is there to assist with easing the financial burden that accidents and injury can bring.

Even in the unlikely event of their passing, their family would still be able to receive a lump sum payment to cover debts such as a mortgage, car loan or any other unpaid bills or expenses.

Ultimately the timing of any conversation about life or funeral insurance is going to depend on an individual’s own personal circumstances and financial situation, but no matter the age or life stage, it’s certainly an area worthwhile discussing.

The points to bring to the conversation

Discussing money can be tough at the best of times, but for many, the subject of their own or their partner’s death and what happens after will be a particularly uncomfortable subject to broach. But like any financial conversation, working out where life and funeral insurance might fit in the family budget is important to raise, especially when a majority of Australians (52.6%)2 admit that not having a secure financial plan in place can be a cause of serious relationship tension.

When it comes to life and funeral insurance, it pays to be on the same page as a significant other to avoid any unnecessary future stress. That means assessing the type and extent of cover needed by weighing up items such as a mortgage, car repayments, school fees, general cost of living and other major expenses that would need to be covered if the worst were to happen. It’s easy to see then how a life insurance policy worth $900,000 could be crucial in covering $36,000 in annual expenses.3

Even for those with an existing policy, it’s important to speak to family members about any policy details that would make life easier for them after an incident or death. It may be useful for them to know who the beneficiaries are, key policy benefits and where any important documents related to the policy are kept.

After all, if they don’t know about the policy, they may not claim it. And that’s a real possibility, according to ASIC’s MoneySmart a total of $81 million4 worth of life insurance remained unclaimed in Australia in 2017, highlighting just how important it is to have these conversations.

So no matter the age or stage of life, discussing the possibility and necessity of life or funeral insurance can be made easier with a bit of preparation and the knowledge that a simple chat might just provide with some real peace of mind in the future.

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

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