How to manage a funeral insurance policy

With funerals in New Zealand costing an average of $10,000, this can place additional stress on your family at an already difficult time, when they’ll be grieving your loss. 

What is a funeral insurance policy? 

A funeral insurance policy is an insurance that’s available to people looking to take care of the cost of their final expenses and ease the burden for their loved ones. Funeral insurance is sometimes referred to as funeral cover.

How funeral insurance works  

When you pass away, your family receive a lump-sum payout (the sum insured amount) they can use to cover any immediate expenses, such as your funeral service or any outstanding bills or debts.

With New Zealand Seniors Funeral Insurance, if you’re a New Zealand resident aged 18 to 79, you’re guaranteed acceptance, however the eligibility criteria will vary depending on your insurance provider. You may not even need to have any medical screening and not have to fill out any complicated paperwork or even get a blood test to apply for funeral insurance. You can also take out cover for your parents, but they’ll need to agree to the policy and meet the eligibility criteria as outlined by the insurance provider of your choice.

How much does a funeral insurance policy cost? 

There is no set price, and the cost of your funeral insurance policy can vary depending on several factors. Your age and medical history can play a part, as well as the amount of cover you apply for and any optional extras you want to take out.

Tips for choosing a funeral insurance policy 

Here are a few tips to help you when choosing a funeral insurance policy that’s right for you:

  • Request quotes from a few insurance providers to see which funeral insurance plan suits your budget and funeral arrangement needs.
  • Compare the cost from different providers and ask questions to get a clear understanding of what is covered so you can do a like for like comparison – you may find that some policies include additional benefits that you may be interested in.
  • Do your research and read reviews to ensure you’re taking out a policy with a trusted insurance provider.

Setting your cover  

How much funeral insurance cover you choose will depend on your personal needs and the type of funeral you want. You can choose your level of cover up to the limits provided by the insurer – usually up to $30,000 depending on which insurance provider you choose to take a policy out with. Your family receive the amount you’re covered for as a lump sum payout if you pass away. 

Updating your cover  

It’s important to review your cover every year to make sure it’s still providing the level of protection you need. A change of circumstances could mean you need more or less cover. Consider factors such as your savings going up or down, taking on or reducing debt, investments maturing or changing, and approaching retirement. 

Once you’ve checked that your funeral cover is still right for your current circumstances, you can get on with life! Remember that if you change your cover, your premiums will also change.  

Choosing your beneficiaries 

For New Zealand Seniors Funeral Insurance, you can nominate up to five beneficiaries  – you can also choose how much goes to each beneficiary. If you don’t choose anyone to receive your benefit, it may go to your estate or another eligible person in accordance with New Zealand legislation. It’s important to note, rules and instructions around nominating beneficiaries may differ depending on your insurer and the product you choose.

Ways to pay  

Funeral insurance works like other insurance policies, where you pay a regular premium based on factors such as your age and the benefit amount. You can pay fortnightly or monthly by 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 some of the important things to check off your list:

  1. Make sure your funeral cover is enough for your final wishes and potentially even to cover any outstanding bills. 
  2. Decide on the best payment schedule for you and your budget. Depending on your insurer, you may be able to choose to pay your premiums fortnightly, monthly or annually. 
  3. Review your cover every year and ensure your details are up to date.
  4. Keep your funeral insurance documentation with your Will and make sure a family member or trusted friend knows where it is.

Considering funeral insurance? Request a quote today to see how Seniors Funeral Insurance can help protect your family from your funeral costs.