Funeral Insurance

Funeral insurance, also called burial insurance or final expense insurance, is a specialized form of life insurance designed specifically to cover funeral, burial, and end-of-life expenses. Policies typically provide coverage between $5,000 and $15,000, reflecting average Australian funeral costs of $8,000-$15,000. The key features distinguishing funeral insurance from regular life insurance include guaranteed acceptance (no medical examinations or health questions in most cases), level premiums (remaining constant throughout your life), immediate coverage (death benefit available from acceptance, though some policies impose 12-24 month waiting periods for non-accidental death), and simplified application processes. Funeral insurance is marketed primarily to older Australians (50+) who may be unable to obtain standard life insurance due to health conditions, or who want to ensure funeral costs don't burden their families. However, funeral insurance is often significantly more expensive than equivalent term life insurance on a cost-per-dollar-of-cover basis, and premiums paid over time can exceed the benefit amount, particularly if you live many years beyond taking out the policy. ASIC has raised concerns about funeral insurance affordability and value, leading to industry reforms including clearer disclosure of total potential premium costs and benefit amounts. Alternatives include saving money in a dedicated account, pre-paying funeral expenses directly with a funeral director, or purchasing a small whole of life insurance policy. Funeral insurance benefits are generally paid quickly (within days) to beneficiaries, facilitating immediate payment of funeral expenses. Coverage typically includes funeral service costs, burial or cremation, casket or urn, flowers, catering, and associated expenses.