Insurance Lecturer — Funerals in New Zealand can be expensive, with an average cost of $10,000¹. Without proper financial planning, paying for a funeral can be a significant burden on loved ones. Fortunately, funeral insurance is available to help alleviate some of the financial stress during an already difficult time.
Designed specifically to cover funeral expenses, funeral insurance can provide peace of mind knowing that loved ones will not be left with a large financial burden. This type of insurance can help cover costs such as funeral home fees, casket or urn expenses, transportation, and more.
How Funeral Insurance Works
Setting Your Cover
Funeral insurance is a policy that pays out a lump-sum amount to your family upon your death. This payout can be used to cover immediate expenses such as funeral services and outstanding bills.
In New Zealand, residents aged 18 to 79 are guaranteed acceptance from many providers without the need for medical screening or complicated paperwork.
When setting your cover, you can choose the level of coverage from $3,000 up to $30,000 (subject to provider). The amount of funeral insurance cover you choose will depend on your personal needs and style.
It is also possible to apply for funeral insurance for your parents, but they must meet the eligibility criteria and agree to the policy.
Overall, funeral insurance provides peace of mind to you and your loved ones by ensuring that the financial burden of your funeral and other expenses is not left to your family after your passing.
Updating your Cover
It’s crucial to review your funeral cover annually to ensure it still provides the necessary level of protection for your current circumstances. Changes in financial situations, such as savings, debt, and investments, could mean you require more or less coverage.
Once you’ve confirmed that your funeral cover is still appropriate for your needs, you can forget about it for another year and continue with your life. Keep in mind that modifying your coverage will result in a change in premiums.
Choosing your Beneficiaries
You can nominate up to five beneficiaries to divide the funds between, depending on the insurer and product you choose. If you do not choose anyone to receive the benefit, it will be distributed to your estate or another eligible individual in accordance with New Zealand legislation.
Ways to Pay
Funeral insurance functions similarly to other insurance policies, with regular premiums based on factors such as benefit amount and age. You can pay fortnightly or monthly via direct debit from your bank, credit union, or building society, or with Visa or Mastercard.
Managing your Funeral Insurance Checklist
Here’s a quick recap of the essential items to check off your list:
- Create a funeral plan and obtain accurate estimates of all anticipated costs.
- Ensure your funeral cover is sufficient for your desires and any outstanding debts.
- Choose how and when to pay to fit your budget.
- Review your coverage every year and ensure your information is up to date.
- Keep your funeral insurance documents with your will and ensure a family member or trusted friend knows where they are located.
Seniors Funeral Insurance can assist in safeguarding your family from funeral costs. To learn more, request a quick quote.