Funeral insurance has become very popular over the last few years in Australia, thanks mainly to the daytime television appearances and advertising.
Another reason for the surge in funeral insurance is due to the aging population of Australia, not to mention the major financial impacts of the GFC on many retirees and pensioners.
There are mixed opinions on whether or not funeral insurance is a good or bad thing.
Is funeral insurance right for me?
Some people argue that funeral insurance becomes too expensive as you get to the age when you're most likely to need it. These people believe that you should save the money you would have spent on funeral insurance premiums, and instead put it into a high interest savings account for when the time comes.
This isn't a bad strategy, but unfortunately we don't know when we're going to die. If you live for another twenty years, then definitely putting the premiums into a savings account will have been a much better option.
But if you die within the first couple of years, then having the funeral insurance will have worked out much better financially.
As you can see, there is no black and what answer to the question of whether or not you should take out funeral insurance.
Another strategy that some people put ahead of funeral insurance is to instead take out a small life insurance policy. This isn't a bad strategy either, but whilst life insurance is cheap when you're young, it does tent to become extremely expensive once you reach the sixty to seventy age barrier.
Whilst people will have different opinions on the right strategy, all agree that you should have some sort of funeral plan in place. Whether that plan involves insurance, savings, or a combination of two, depends on your own personal circumstances.
Holding a funeral in Australia is definitely not cheap, and if you don't have enough funds yourself then funeral insurance may well be a good option for you. But remember, it's no good taking out funeral insurance for just a year or two. To be effective and worthwhile, you need to keep that insurance until the day it is claimed on.
Funeral insurance is available through a number of insurance companies in Australia. A number of the funeral plan providers advertising on television are foreign owned, however there are a number of the big Australian insurance companies and banks offering a similar cover.
For more information on funeral insurance please contact us or speak with your financial adviser.