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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.

Funeral insurance is one way to help take care of this expense now, so your family won’t need to worry later. 

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What is funeral insurance?

As the name suggests, funeral insurance is a policy designed to help loved ones cover the costs of a funeral.

Whilst most families probably use the benefit they receive for the memorial service and burial or cremation, they can actually use the money for anything they like. This might include settling final debts or paying bills that the deceased has left behind.

However, it could also be used for their own household expenses, like groceries, childcare or utilities. These bills don’t go away just because someone you love has passed away. The money a funeral insurance policy may provide could help take this worry, as well as paying for the funeral, off their minds during this difficult time.

Why do people buy funeral insurance?

For many, funeral insurance is a simple way to help give their family some peace of mind after they’ve passed away. 

With the cost of funerals going up, many people worry about leaving this expense for their loved ones. An average funeral costs around $9,000 in New Zealand—and sometimes much more. And it’s an expense that often comes unexpectedly and needs to be organised on short notice.

But, even in situations where it’s more apparent that a funeral may soon need to be arranged, coming up with money for the service might still be difficult. In some situations, personal savings or an emergency fund might have already been used up to help cover medical bills or taking time off work beyond normal annual or bereavement leave. 

As we already mentioned, even day-to-day expenses may become more of a burden when a loved one passes away. Helping remove even a tiny bit of this stress could make a big difference to your family.

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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 there are some things you might want to consider:

  • How much are you able to spend? Life insurance premiums usually go up each year as you get older, pricing out some people looking for cover. Funeral insurance typically features set premiums when you take out cover that don’t go up afterwards due to age, making it a more affordable option for many.
  • Are you in good health? Life insurance policies can have health-related exclusions—that is, if you are to die as a direct result of certain pre-existing conditions, the benefit will not be paid, or depending on your health, you may not be able to get cover at all. Funeral insurance usually has fewer exclusions, meaning it could be more accessible to people who aren’t in perfect health.
  • Does your life insurance expire? Some life policies only cover people up to a certain age. After that, the cover ends, and your family cannot make a claim. Funeral insurance policies generally provide cover for life, regardless of how old you may get.
  • How do you hope to help your family? How your family might use an insurance benefit could also impact your decision. If you just want to cover funeral expenses (and maybe a bit more), funeral insurance might be the best fit. However, if you have bigger ideas in mind—paying off a mortgage, funding university, providing support for several years—then you may prefer a life insurance policy.

Getting covered

If you’re ready to take out a funeral insurance policy or just have more questions, contact us today. Momentum Life makes it quick and easy to receive an obligation free quote.


A version of this article was first published on 14 March 2017 and has since been updated with more current facts & figures.


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.

All product information is correct at the time this article was published. For current product information, please visit the Momentum Life website.


About Author: Momentum Life is a leading provider of Life insuranceFuneral insurance and Accident insurance in New Zealand.

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