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Funeral insurance

Cover can cost a lot more than your funeral

Page reading time: 2 minutes

Funeral insurance can cost you a lot more than the benefit your family will receive. And if you stop making repayments, you lose what you've already paid.

How funeral insurance plans work

A funeral insurance policy gives your family a lump sum payment to pay for funeral expenses when you die.

You pay monthly or fortnightly premiums (ongoing payments) for a fixed amount of cover. Usually you can choose from $5,000 to $15,000 cover, which will be paid to your family when you die.

You are not saving for funeral costs with funeral insurance. You are buying insurance to meet those costs at some future date.

Don't sign up for expenses only funeral cover. Your family may need to prove the funeral costs with receipts to make a claim. It offers you less legal protection and has a lot of exclusions.

Funeral insurance costs a lot in the long run

You keep paying for funeral insurance until you die. If you're considering a funeral insurance plan, think about:

Not all funeral insurance plans are the same. Shop around and compare funeral insurance quotes before you sign.

Pros and cons of funeral insurance



Cheaper ways to cover funeral costs

There may be cheaper ways to help your family pay for your funeral. Consider alternatives to funeral insurance, including:

See paying for your funeral for more information about your options.

Woman looking up from newspaper.

Mary pays a lot for funeral insurance

Mary was 58 and still working when she took out funeral insurance costing $20 per fortnight. She wanted funeral cover so her family didn't have to worry about paying for her funeral.

By the time Mary was 71, her premium had doubled and was costing her more than $40 per fortnight. It had gone up every year as she aged and to cover inflation.

Mary struggled to pay the higher premium on her much lower, retirement income. And she knew it would continue to go up each year.

Mary added up all the premiums she had paid. She worked out that funeral insurance had already cost her more than $10,000 over 13 years.