Is funeral insurance right for you?

Concerns have been raised by the Australian Securities and Investments Commission (ASIC) that advertising by the funeral insurance industry is confusing to consumers, with many unable to understand important aspects relating to this product. An industry review has lead to one provider changing the way it promotes funeral insurance.

But funeral insurance is not the only product on the market. YOURLifeChoices has researched the options available for those who wish to plan ahead.  While our own funerals can be a delicate subject, by doing some advance planning and investigation you can ensure that you get the best value for money as well as making things easier for your loved ones.

Depending on what type of funeral you choose, for example a cremation versus a burial, prices can vary between $4,000 to $15,000. So how do you ensure there is sufficient money available to cover the cost of your funeral?

Of course, the obvious option is to save your money in an account until you have a sufficient amount to cover the funeral you want. But this is not always achievable for those on an Age Pension or limited income.

Even though the money from your superannuation or life insurance can be used to pay for your funeral, the reality is that the money may not be released to your dependents or estate for quite some time.  In this case, or if you do not have life insurance or superannuation, you may choose to purchase a funeral benefit product such as one of the following.

Prepaid funeral plans
where consumers choose and pay for their funeral with costs calculated on the features selected, e.g. the style of coffin.


  • Costs fixed in today’s dollars
  • You have control over the arrangements such as the type of casket, music, etc
  • Can be paid in instalments


  • Can be inflexible if you move interstate
  • You may not be able to get your money back if you change your mind


Funeral bonds
investment products to assist with saving for your funeral expenses. The funds are withdrawn after your death to pay for your funeral.


  • Are exempt from the asset and income test for the Age Pension
  • Your savings will generally grow over time
  • Can be assigned to a funeral director of your choice
  • Can be purchased upfront or paid in instalments


  • If you are paying for your bond in instalments and die before it is fully paid for, you will only receive what has been paid into the bond plus any money earned on the investment 
  • Returns may not keep up with inflation
  • Funeral costs will not be locked in at today’s dollars
  • If you discontinue the bond, you might not be able to get your money back


Funeral insurance
you pay a premium, e.g. monthly or fortnightly, for a fixed amount to be paid to a nominated beneficiary after your death.


  • You receive cover from day one
  • Insurance is familiar and is affordable in the short term if you aren’t sure you will be able to save for the cost of your funeral


  • Most premiums will increase over time
  • You do not always get back the premiums you have paid if you cancel your policy
  • Most insurers only cover accidental death in the first two years of the policy, so you may not be covered if you die from a terminal illness.
  • Because you don’t know when you will die, you may be paying for funeral insurance for the next 10, 20 or more years and may end up paying more in premiums than the cost of a funeral.
To find out more about funeral insurance, or for a funeral insurance quote, call InsuranceLine on 13 77 87, or visit