Many of us will later in life come to a decision that we should get something in place to pay for our funeral. Some will consider taking out funeral insurance especially if we are have been exposed to the many advertisements shown on daytime television – you know those highly emotional ones that can make us feel like we are bad parents if we haven’t got something organised . In many cases the taking out of funeral insurance by an elderly person will prove to be a costly mistake, or even worse, could end up being a fruitless exercise. This is because with most life insurance policies (as funeral insurance actually is) the missing of 2 consecutive premium payments can render a policy void – in other words the policy is cancelled without the return of any of the premiums paid. With most of these funeral insurance plans that target retirees, the premiums increase annually meaning many elderly people, particularly those on a fixed income like a pension, can reach a point where they simply cannot afford the premiums. Of course, regardless of how payments are stopped, the result is the same – the funeral cover ceases and there is no refund of premiums.
A far more cost-effective strategy is to commence a funeral insurance policy at a younger age. For those who do this the secret is to choose one that has fixed premiums and a defined time as to when premiums are payable. You can then easily calculate the total amount of premiums payable (the total cost) by simply multiplying the annual premium by the number of years to pay. One such policy is Sureplan Family Fund which has fixed premiums payable only until age 60. Applications can be made for people aged 1 to 55. For more information, go to www.sureplan.com.au or call Sureplan on 1800 817 105.