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Funeral Insurance basics

What Is Funeral Insurance?

Funeral insurance is a simple insurance policy which pays a lump sum when you pass away. It removes the financial burden of paying for a funeral from those that you leave behind. Acceptance is usually guaranteed, premiums don't go up, and the application is quick and easy.

Who is paid?

The claim payment is paid to the insurance's "policy owner"

Is acceptance guaranteed?

Usually, yes. Policies ask no medical questions and offer guaranteed acceptance to NZ Residents or Citizens, regardless of their health. One exception is Fidelity's plan - this is not available to people that are aware that they are terminally ill (which means that they are likely to have 12 months or fewer to live). Also, there can be age restrictions - for example you might not be able to apply with some insurers if you're over 75. The easiest way to check age eligibility is to do a quote on LifeDirect - we'll only show insurers that you are eligible to apply with.

What is covered?

Policies are very similar. For the first 2 years they will only pay out on death due to accident - other causes of death (like illness) are not covered. After 2 years, you are also covered for other causes of death. During the first 2 years, if a non-accidental death occurs, the insurer will refund all premiums paid.

What isn't covered

Check our comparison table for a list of "exclusions". There are usually very few or even none.

Do premiums increase?

Premiums are designed to stay the same. Most insurers guarantee that their premiums won't go up.

How much does a funeral usually cost?

According to the Citizens Advice Bureau the average cost of a funeral is $8,000-$10,000. However costs vary a lot as they depend on your wishes and factors like where you live.

Who is funeral insurance right for?

Funeral insurance is great for people looking for a simple policy to provide a lump sum to help with funeral costs. It's not suitable if you are looking for life insurance to cover other costs (like a mortgage), as the sums you can insure tend to be relatively low. Also, for people with enough savings to take care of funeral costs, funeral insurance might not be needed.

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