How funeral insurance works
Funeral insurance is a financial helping hand you can provide for your family. When you pass away, your family will receive a lump sum benefit payout they can use to cover any immediate expenses, such as a funeral service or outstanding debts.
Funeral insurance works much the same way as other insurance policies – where you pay a fortnightly or monthly premium based on factors such as your age, smoker status and the level of cover you choose. It can help you ensure your final expenses are covered without any inconvenience to those most important to you.
Every day in New Zealand about 80 funerals and memorial services are held on marae and in churches, temples, mosques, synagogues, funeral home chapels, community halls and suburban gardens.¹
What it covers
A funeral insurance policy can help your family honour you with a service and celebration of life that suits your style. A funeral in New Zealand costs on average $10,000², which can be a stressful bump in the financial road for loved ones during an already tough time.
By choosing a benefit amount that suits your needs, you and your family can take comfort in knowing they can pay for any immediate expenses that may occur when the time comes.
A funeral insurance policy will usually provide an immediate cash payout when a claim is made, which can be used to cover:
- your funeral service
- bills or expenses you leave behind
- immediate mortgage or loan repayments
- whatever your family needs at the time.
What to consider when getting funeral insurance
Planning how your funeral is paid for is just as important as planning and saving for other events in your life. Consider the style of funeral you want – can your loved ones afford this? This is where funeral insurance can help cover the costs and other related expenses. Learn more about who should consider funeral insurance.
Who pays for your funeral?
In most instances, your next of kin (spouse, child, parent, legal partner or sibling) is responsible for arranging and paying for your funeral. You or your family members can take out funeral insurance cover which means there’s one less thing to worry about when the time comes for your family to pay the funeral costs.
When taking out funeral insurance, consider the following when choosing your cover:
- funeral service expenses (e.g. burial, cremation, death certificates, flowers, clergy fees etc.)
- your savings
- other insurances you may have
- government funeral grants available to you
- personal bills or loans you may leave behind.
A funeral in New Zealand costs on average $10,000.²
Funeral expenses to consider
- funeral director
- burial fees or cremation costs
- death certificate
- newspaper notice
Depending on your personal style and your family’s needs, funeral expenses can vary.
Learn more about how much funerals cost