Before purchasing funeral insurance, it is essential to check whether it is the right choice for you. Specifically, if it will be worth the expense, you will pay in premiums.
Take a look at these considerations.
Benefits
Can help you save
It is a handy way to make sure you save enough funds to cover your funeral expenses.
Instantly covered (with exclusions)
You can be covered immediately.
Disadvantages
Exclusions apply
Only accidental death is covered for the first two years in most policies. Should you die from another cause, you may find that you are not covered.
Rising premiums
More than likely your premiums will increase over time. A policy that may seem initially like the best cost-effective solution could, in reality, be expensive in the long run.
Premiums can exceed the cost of your funeral
As Australians continue to live longer, you could end up paying more in premiums than the cost of your funeral.
Your beneficiaries must wait for payouts
Your family members may have to wait to receive an insurance payout to cover your funeral costs.
Non-refundable premiums
Should you cancel your policy or find you can no longer afford to pay the premiums, you generally can not receive a refund on the premiums you have already paid.
It is always important to check the terms and conditions of a policy before making your final decision.
