Why You May Need Funeral Insurance

They say that there are two things in life you cannot avoid – death and taxes. And while both are topics that many would rather avoid, they are events that should be planned for, like anything else. Failure to do anything about either could leave others with a big problem to sort out when you are no longer around.  

Even if the death of a spouse, family member, or close friend is expected, it can still be a traumatic event for loved ones to deal with. Having to pay out large sums of money for a funeral may add to their stress and misery. 

Fortunately, there is something you can do now to take part of that burden off them. Taking out funeral insurance, which can pay a lump sum in the event of your death could be a big help  

Here are four reasons you might need to take out funeral insurance. 


Funerals can be very expensive

Dying is an expensive business. There are more items than you may think that go to make up a funeral – and they all add-up. 

To start with, there is the cost of the casket. In New Zealand, this can cost up to $10,000 just by itself, depending on the make and model. And then there is the burial plot. If you live in a prime urban area and want to be buried near your family and loved ones, a simple plot can cost anywhere between $3,000 and $6,000. Once you throw in the cost of the funeral director’s fees, a headstone, flowers, the hearse, and all the expenses of a wake, you may be looking at a total bill of $20,000 and upward.  

For some, that sort of bill can be really tough to foot. And, even if they can afford it, aren’t there better things your family could be doing with that money? 


Life Insurance Policies may not offer full cover

One of the reasons that people do not bother taking out funeral insurance is because they believe this is covered by their existing life insurance policies. Sadly, this is not always the case. 

At the most basic level, this may be because the policy has lapsed because the policyowner has failed to keep up with the premiums. Another reason is that the life insurance taken out was a term policy, which expires when the policyowner reaches a certain age. 

The soaring cost of funerals may also need to be taken into account. If the life insurance policy was taken out a long time ago, a funeral may have cost a fraction of what it does today. Will the amount that is paid out fully cover the cost of your funeral when you are gone? If it does, will that “eat” into the money you thought you were leaving your family and friends to help with their future lives?  


It is easy to qualify

Unlike life insurance, which may require you to answer detailed questions about your health, funeral insurance is generally easier to arrange. There are usually no medical evaluations or blood tests needed to get a policy. Typically, you just need to answer a few straightforward questions to applyEven if you are not in perfect health, many insurance companies will still cover you. And, once your policy is in place, cover often continues for life (as long as the policy has not lapsed). 

For this reason, funeral insurance is often much quicker to arrange as well. Fill in a form or speak with an agent over the phone, and you could be covered in a matter of minutes. It is not a bad trade-off for giving peace of mind not only to you, but also to your loved ones. 


There is a lot of available choice

Whilst some companies may specialise in one type of insurance or another, nearly all of the major service providers offer funeral insurance. This means that there is a wide variety of possible solutions available to suit all budgets or family circumstances. Better yet, many funeral insurance companies offer fixed premiums, meaning the cost of your policy will not go up just because you’re getting older. 


Giving you peace of mind

As you can see, funeral insurance might be a good idea for you and your family. Providing peace of mind that some money may be there to help pay for the funeral could help everyone rest easier.  


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