Planning for the cost of your death isn’t the nicest piece of… well, life planning you’ll ever do, but funerals cost money,
It’s why many Australians turn to funeral insurance to make sure their loved ones don’t have to stress about money at an upsetting time. But life insurance can often give better value for money when you compare what the two products offer.
Paying more than what you’ll get in return
When you’re planning for your funeral, it’s easy to think that the best way to cover costs is by taking out a dedicated funeral insurance policy. It makes sense, right?
Unfortunately, funeral insurance can often be an expensive mistake that can often end up costing older Australians more in premiums over the life of the policy than they’d actually pay for their funeral.
Most funeral insurers won’t let you take out a policy after the age of 79, yet you’ll have to keep paying premiums until you’re 90.
Plus, you’re only covered for accidental death in the first 12 months, pay outs are usually capped at $15,000 and you can only spend it on your funeral.
So the longer you live, the more you’ll be paying. That’s often more than the $15,000 your family could be spending on your funeral and you’ll lose what you’ve already paid if you cancel your funeral cover.
Even the government says it can be bad value for money. It’s why life insurance can be an affordable, stress-free way to cover the cost of your final wishes without throwing your hard-earned retirement money into a black hole.
Why Life insurance trumps funeral cover
Many life cover policies, that aren’t funded through your super, come with a funeral advancement.
This means your family will receive a payout to cover the necessary costs without you also having to pay for separate funeral insurance.
Aside from providing you with a lump-sum payment after you pass away, there are substantial differences between life and funeral insurance.
Life cover provides a much more flexible policy – you don’t have to spend the benefit payout solely on your funeral.
Built-in funeral advancement within a life insurance product, also means the money to cover the cost of your burial will be released before the rest of the payout, helping with cash flow at a stressful time for your loved ones.
The experts at Life Insurance Comparison assess policies from 10 of Australia’s leading life insurers to find a policy that’s affordable and can cover the cost of your funeral.
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This article is our opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.