If you’re like most New Zealanders, planning for your own funeral is the last thing on your mind. Thinking about death can be difficult. It may also be low on your list of priorities, especially if you’re young.
Unfortunately, death will reach us all, and funeral costs are on the rise. Considering how your loved ones would pay for a funeral can help them avoid some financial stress during an already difficult time.
What is funeral insurance?
Funeral insurance is, as the name suggests, a policy designed to help protect your loved ones against the costs associated with a funeral. Funds can also be used to settle debts, pay bills, or cover other household expenses, such as groceries or childcare.
Just in case
A funeral insurance policy may offer optional extras that increase the benefit payout or provide further funds to ease your family’s financial burdens.
Unfortunately accidents do happen, but thankfully some funeral policies do cover such events. Accidental Death Cover provides an extra lump sum if you pass away as a direct result of an accident, and Accidental Serious Injury Cover can be paid if you suffer a defined serious non-fatal injury. Both extras can help ease the burden of substantial medical bills, being unable to work or paying household expenses.
In addition to the lump sum payment provided by a funeral insurance policy, you can also opt to include Household Expenses Cover. This extra provides a smaller benefit amount each month for a set period of time. This can further help your family pay for monthly household expenses, such as groceries and petrol.
Isn’t a life insurance policy enough?
If you already have or are considering purchasing a life insurance policy, you may be wondering if funeral cover is also necessary. The answer will ultimately depend on your budget and financial needs, but both policies can work together to help provide extra peace of mind for your loved ones.
Whilst life insurance policies provide a larger benefit amount, funeral insurance policies are usually paid more promptly. Due to the immediacy of planning a funeral, these policies are usually paid within 48 hours of the insurer receiving the necessary paperwork. Your family can begin making arrangements using these funds whilst they wait for a life insurance policy payout.
Disclaimer: The information provided in this article is of general nature, and does not take into account your personal situation. You should consider whether the information is appropriate to your needs or seek professional advice, where necessary.