Planning a funeral can end up costing a lot of money. Funeral insurance is a common way to help cover your funeral expenses without adding extra pressure on your loved ones in an already challenging time, but it also has its drawbacks.
What is funeral insurance?
Funeral insurance is something you purchase to cover the cost of your funeral after you die. Since arranging a funeral can be quite costly, funeral insurance is one way to plan ahead and make sure your family doesn’t have any added financial stress during an already difficult time.
How does it work?
You make ongoing (usually fortnightly or monthly) payments based on your level of cover and age. On average, funeral insurance policies cost between $3,000 to $15,000. Then when you pass away, your funeral insurance company pays your family a lump sum to cover your funeral expenses.
Why should you plan ahead for your funeral?
When you pass away, your family is responsible for arranging and paying for your funeral. The cost of a funeral depends on the selections made by your family. Thinking ahead and deciding how to pay for your funeral can spare your family from additional financial anxieties. When planning for expected funeral costs, funeral arrangements often include:
Removal and preservation of body
Burial or cremation
Coffin or casket
Cemetery and grave fees
While funeral insurance can help relieve some of the pressure and protect your family from financial stress, the cost of these items and services can quickly add up.
What do you need to consider with funeral insurance?
The premiums for funeral insurance might initially be low but can gradually increase over time. As you get older, the cost of your premiums get higher. Instead of leaving any additional money in your estate, you can end up paying thousands of dollars in excess straight to your insurance provider.
There’s also the risk of losing your funeral insurance if you miss a payment. If you find yourself in a situation where you’re unable to afford your ongoing premiums, your previous payments can be forfeited.
Is there an alternative to funeral insurance?
Prepaid funerals and cremations can give you greater reassurance in uncertain times.
If your finances begin to fluctuate as funeral costs continue to rise, prepaid services can be fixed at today’s prices well into the future, saving you and your family money.
As planning and payment are organised well in advance, prepaid funerals can simplify some of the hardest parts of funeral arrangements.
For further assistance arranging and prepaying an affordable and personalised farewell, our friendly team at Safewill Cremations can help.