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What is funeral insurance and how does it work?
Funeral insurance is designed to help cover funeral and end‑of‑life expenses by paying a lump sum when you pass away. In most cases, you choose a benefit amount and pay regular premiums, with the payout going to your chosen beneficiaries or estate to help manage final costs.
It’s often considered by people who want a simple way to plan for funeral expenses without locking in services upfront or relying on personal savings alone.
Do I need funeral insurance?
Deciding whether funeral insurance is right for you isn’t just about money – it’s about how you want to prepare and the peace of mind you’d like to have in place. You may want to consider funeral insurance based on your stage of life and financial needs.
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If your savings are meant to cover unexpected expenses or secure your kids future, funeral insurance can help cover final costs. By paying premiums over time, you may be able to plan ahead without needing to set aside a lump sum specifically for funeral expenses.
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Taking out life insurance later in life may prove expensive for some people or not even be unavailable to others. Funeral insurance may be worth considering if you don’t have life cover and want a dedicated way to help fund funeral costs.
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Funeral costs can add pressure during an already emotional time. Funeral insurance is often chosen by people who want to ease that burden and give loved ones financial support – helping them focus on saying goodbye instead of worrying about expenses.
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Prepaid funeral plans can offer certainty, but they also require committing to specific services and providers in advance. Funeral insurance can offer more flexibility, allowing your family to decide how the payout is used and make arrangements that suit their needs at the time.
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Even without dependants, funeral insurance may still be worth considering if you want to ensure your final expenses are taken care of. It can help cover costs without relying on extended family or your estate to fund funeral arrangements.
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For retirees or seniors living on a fixed income, budgeting for a large one‑off expense can be challenging. Funeral insurance may provide a manageable way to plan ahead, with regular premiums going towards your cover.
Some things you should know
- Cover is only for accidental death and accidental serious injury in the first 12 months.
- Accidental serious injury and optional Accidental Death Insurance expire on the policy anniversary following your 75th birthday.
- Terminal illness diagnosis with 12 months or less to live.
- There’s no refund of premiums after the cooling off period. The total amount of premiums payable over the life of the policy has the potential to exceed the cover amount.
- If you choose the early cash out option, you will no longer be eligible to claim as this option will cancel your policy and you may receive less than you’ve paid in premiums to date.
- This is a summary of the Real Funeral Insurance policy. For full details, download our Product Disclosure Statement.