When it comes to planning for the future, many Australians focus on superannuation, home insurance, or health cover — but what about the inevitable costs of saying goodbye?
Funeral insurance is one option that can help relieve the financial burden on your family when the time comes. But is it the right choice for you? How does funeral insurance work, and what should you consider before signing up?
In this guide, eziFunerals breaks down everything you need to know about funeral insurance in Australia. Whether you’re pre-planning your funeral or looking for ways to protect your loved ones from unexpected expenses, this article will give you clear answers.
What Is Funeral Insurance?
Funeral insurance is a type of policy designed to cover the cost of your funeral when you pass away. You pay regular premiums (weekly, fortnightly, or monthly), and upon your death, your nominated beneficiary receives a lump sum payout.
This payout can help cover funeral expenses such as:
- Funeral director fees
- Coffin or casket costs
- Burial or cremation fees
- Flowers, transportation, and venue hire
- Death certificates and legal paperwork
- Memorial services or catering
Importantly, the payout can also help with any outstanding debts or final expenses, offering your family some financial breathing room during an emotionally difficult time.
Quick Snapshot:
- Regular premiums.
- Lump sum benefit on death.
- Helps cover funeral and related costs.
How Does Funeral Insurance Work in Australia?
1. You Select the Cover Amount
Most Australian funeral insurance providers allow you to choose your desired cover amount. This usually ranges between $5,000 to $15,000, depending on your needs and what you expect your funeral to cost.
Tip: Use eziFunerals’ comparison tools to get an estimate of average funeral costs in your area, so you can make an informed choice.
2. You Pay Regular Premiums
Once your policy is in place, you’ll pay premiums regularly. Payment frequencies vary but are commonly weekly, fortnightly, or monthly.
Your age, health, and the amount of coverage you select will all affect how much you pay. Some providers also offer capped premiums or “premium pause” options if you experience financial hardship.
3. Policy Activation and Waiting Periods
It’s important to understand the waiting periods. Many funeral insurance policies have an initial waiting period (commonly 12 months) before full benefits are payable for death by natural causes.
However, accidental death is typically covered immediately after the policy begins.
4. Your Beneficiary Makes a Claim
Upon your death, your nominated beneficiary (usually a spouse, child, or trusted friend) contacts the insurer to lodge a claim. They’ll need to provide:
- Proof of death (death certificate)
- Policy details
- Identification documents
The insurer will then process the claim, and the lump sum is paid to your beneficiary to cover your funeral costs and related expenses.
Pros of Funeral Insurance
Funeral insurance can be a helpful safety net, particularly for Australians who:
- Want to ensure their loved ones aren’t left with unexpected funeral bills.
- Don’t have sufficient savings set aside for end-of-life costs.
- Like the simplicity of regular premium payments to cover future expenses.
- Want fast access to funds for their family upon passing — claims are typically paid within days once approved.
Additional Benefits:
- No medical checks: Unlike some life insurance policies, many funeral insurance providers do not require medical examinations.
- Immediate accidental death cover: Provides early peace of mind.
- Flexible policy options: Tailor the cover to your needs and budget.
Cons of Funeral Insurance (And What to Watch For)
While funeral insurance offers valuable peace of mind, it’s not perfect. Here are some considerations:
- You might pay more in premiums than the payout value.
If you live a long life (which we all hope for!), you may end up paying more in premiums over the years than the benefit your family receives. - Premiums can increase with age.
Some policies raise premiums as you get older, which can make them unaffordable later in life. - Policies may lapse if you miss payments.
If you stop paying premiums, your policy could be cancelled, and you may lose all the money you’ve already paid. - Waiting periods apply.
Natural death benefits typically aren’t payable within the first year of the policy.
eziFunerals Tip: Always read the Product Disclosure Statement (PDS) carefully before committing to a policy. Understand exactly what you’re covered for, and consider whether funeral insurance is the right fit for your circumstances.
Alternatives to Funeral Insurance in Australia
Before you commit, it’s worth exploring other options to see what suits your needs best:
1. Prepaid Funerals
You pay upfront (or via instalments) for your funeral at today’s prices, locking in costs and saving your family from future inflation.
2. Funeral Bonds
Invest money specifically for your funeral. These funds grow over time and can only be accessed to pay for funeral expenses.
3. Savings Account
Some Australians prefer to set up a dedicated savings account for funeral expenses. While this relies on discipline, it avoids insurance premiums and policy restrictions.
4. Superannuation Death Benefit
Your super fund may pay out a death benefit to your nominated beneficiaries, which they can use towards funeral expenses. However, accessing this can take time.
Is Funeral Insurance Right for You?
The decision to take out funeral insurance depends on your personal circumstances and financial goals.
Ask yourself:
- Do I have enough savings to cover funeral costs?
- Will my family be financially impacted by my funeral expenses?
- Am I comfortable paying ongoing premiums for peace of mind?
- Have I explored prepaid funeral plans or funeral bonds as alternatives?
At eziFunerals, we recommend comparing funeral insurance policies carefully and considering all options before you decide. Our independent platform helps Australians make informed choices that align with their budget and wishes.
Final Thoughts: Plan Today, Peace of Mind Tomorrow
Funeral insurance isn’t a one-size-fits-all solution. For some, it offers valuable protection and peace of mind. For others, alternative planning methods may make more financial sense.
What matters most is having a plan in place. Planning ahead not only relieves your family of financial stress but also ensures your wishes are honoured when the time comes.
At eziFunerals, we’re here to support you every step of the way — from understanding funeral insurance to comparing prepaid plans and funeral directors.
Ready to explore your options? Visit eziFunerals.com.au today to compare funeral insurance and start planning with confidence.
Peter Erceg
Peter Erceg is the Owner and Founder of eziFunerals. He has had a long history within the funeral industry, and is a published author of ‘What Kind Of Funeral: A self help guide to planning a meaningful funeral’. Prior to eziFunerals, Peter worked in the public sector and health industry for more than 30 years. The views and opinions expressed on posts are those of the author and do not necessarily reflect the opinions of eziFunerals and members.
