Calls for reform over funeral insurance ‘rort’

is funeral insurance worth it

“I can sum up funeral insurance in a few words,” says Kimba Griffith, founder of The Last Hurrah funerals. “Don’t do it!” 

And it seems that Ms Griffith’s warning is not an isolated opinion.

The CEO of Tasmania’s No Interest Loan Scheme (NILS), John Hooper, believes the funeral industry needs reform and, according to a recent ABC News report, one consumer’s challenges showcase the issues within the sector.

The story of Tasmanian Rowena Sweeney presents a strong case that the cost of funeral insurance far outweighs the eventual benefit. Without access to any significant savings, Ms Sweeney took out a funeral insurance policy to prevent her home being sold to pay for her service. But, as the ABC report shows, she now feels trapped by the ongoing premiums and has already paid $88 a month for more than 10 years.

So far, Ms Sweeney estimates, the cover has cost her more than $10,000.

The eventual payout benefit is set at $15,000 but Ms Sweeney is locked into paying premiums for life, essentially, with her obligation to pay monthly premiums to TAL insurance only stopping when she turns 90.

But for Ms Sweeney, aged 60, 30 more years at $88 per month means paying another $31,000+, in addition to the thousands TAL has already received. And if she pulls out? She loses everything.

She admitted being lured by a television advertisement and, although the fine print did offer the protective disclaimer that consumers consult a financial adviser, Sweeney didn’t – and it’s a decision that has cost her dearly. For Ms Sweeney’s daughter, who is only in her early 30s and also signed up at the same time, securing her $15,000 payout is also dependent on what is essentially a lifetime of monthly premiums until the age of 90.

Although no spokesperson for insurance company TAL would comment to the ABC News on individual customers, it did deliver a marketing spiel that “funeral insurance was valued by customers who could not pay up-front for a prepaid funeral”.

“We take great care to ensure our customers understand that products they are purchasing from us are insurance products and not funeral savings products, which are different,” the spokesperson told the ABC.

From the perspective of John Hooper from NILS, though, “it’s just not fair”.

“If they pull out of their funeral arrangement because they think it is a rip off and then they do pass away a fortnight later, even though they might have spent $10,000 or $20,000 [in payments] … they’re not covered. That’s just not right,” he told the ABC.

“It’s an absolute rort,” says Ms Griffith at The Last Hurrah. “You may pay many times what you’d pay for a funeral if you live a long life, and, once you start it, you can never stop. or you lose the entire amount.”

A better and more affordable alternative, she says, is to get a funeral bond “that you can control”.

“You can pay into it over time and then assign it to a funeral director,” she says.

Are you caught in a funeral insurance plan you can’t get out of? Have you prepaid your funeral? Have you had to fund the funeral costs of a loved one who had not prepared financially? Share your stories in the comments section below.

Read more: The last (ever) waltz – finding your favourite funeral songs

Written by Claire Halliday

Claire is an accomplished journalist who has written for leading magazines and newspapers, such as The Sunday Age and Sydney Morning Herald, Australian Women's Weekly, Marie Claire, Rolling Stone, Australian House & Garden, GQ, The Australian, Herald Sun, The Weekly Review, and The Independent on Sunday (UK).


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  1. I’m afraid I’m another Mrs Griffith. I’ve had a funeral policy with TAL for as long as I can remember and still paying monthly premiums. I would have paid for a funeral quite a while ago, but now I can’t afford to just drop the policy, I’ve paid too much into it. I feel that there should be some sort of Government intervention into the industry to guarantee that policy holder’s beneficiaries either get their sum insured when their loved ones pass away, or the equivalent of what they’ve paid over the years, whichever is the largest amount. After all, they’ve had our money for a long time and imagine the interest they’ve accumulated on it.

  2. I started paying a funeral insurance policy for my husband and I in 2008 when I was 53. At the time I think premiums were around $20 p/ftnt. By the end of 2015 premiums had risen to $50 p/ftnt and I decided to cut my losses. I called the company and asked to cancel my policy. Cue the hard sell, and in the end I agreed to a lower premium of $30 p/ftnt for reduced cover. A few months later my husband was diagnosed with terminal cancer so it seemed prudent to continue the cover. Now, 8yrs later, the premium is $77 p/ftnt – almost as much as we’d pay for health insurance if we could afford it. My husband is thankfully defying the odds but if I stop the policy now all that money goes down the drain. Hard not to see it as a rort.

  3. I’ve prepaid my funeral with a local funeral director and am very happy. I’ve given the details to my daughter (my NOK) so that when I do pass she will be able to hold my funeral without incurring any extra expense.
    Some have pointed out that the money I paid is now earning interest for the funeral director but to me that is far less of an expense than me paying fortnightly insurance premiums where the money disappears entirely if one cancels one’s cover.

  4. I had a policy with Zurich, payments went up to $1300 a month, when I queried that they said it’s because he might die which is why we had the policy. However if I continued until he was 90 there would be no more payments.

  5. Just like Jezemeg8, I prepaid my funeral with a local funeral director ~ $4500, no further money needed. If the funeral company goes into liquidation my prepaid policy goes to another funeral company. One of my friends took out funeral insurance and has paid at least twice that and of course is now locked into the policy. Funeral insurance is simply a rort.

  6. Helpme
    I have the same with Insurance Line. I have paid since I had the cancer for more than 10yrs now and currently just received an increase of approx $70 monthly. I wish to discontinue cause I don’t see the point as I now can afford my own funeral expenses if I put aside money and also get it off my super death benefit. Like everyone else, to cancel will lose the 10k I’ve accumulated. I have always thought it isn’t a fair system and also feel the Government intervention is needed.

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