There are a few features that will determine if the funeral plan you are considering is a fair and reasonable policy;
- The age when premiums cease
With some funeral insurance plans premiums are payable until age 90, while with others, premiums are only payable to age 80. The saving of 10 years of premiums can be huge.
There is even one plan for which the premiums finish at age 60 – but more about this plan later.
- Are premiums fixed, or do they increase annually?
One of the big mistakes people make when selecting funeral insurance cover is not finding out before the sign up as to whether the premiums will increase each year. With some funeral insurance plans that have annual premium increases the rate can treble from age 60 to 80, which can render a policy simply unaffordable – and be aware that if you cannot continue to pay the required premiums your policy will lapse with no refund of the premiums previously paid.
Therefore, it makes sense to have your funeral insurer fully disclose the premiums you will be liable to pay if you are contemplating a policy with premiums that increase annually. Or better still, choose one that has fixed premiums.
Some funeral insurance policies will only cover accidental death in the first 12 or 24 months while others may exclude pre-existing medical conditions. Insist your selected funeral insurer fully discloses any policy exclusions.
- Claims Process
It is important to know how quickly and easily your family will be paid when you eventually die. Some funeral insurers need to see a certified copy of a death certificate together with a claim form completed by the family – all of which can take time and may mean the claim payout is not available in time for the funeral.
There is one funeral insurer that guarantees to pay the claim within one working day of receiving written confirmation of a death – and its funeral insurance policy has fixed premiums payable only until age 60 and members receive an immediate full and comprehensive cover (medical conditions apply). This fund is called Sureplan Family Fund and for more information visit www.sureplan.com.au.