Your funeral gives your family a chance to say goodbye. Funeral Insurance provides peace of mind, to know that your family has one less thing to worry about if you were to pass away. Funeral Insurance will be paid to your loved ones to cover the cost of your funeral – even if only a fraction of the cover amount has been paid in premiums.
There are different options available to pay for a Funeral in Australia. We recognise that there are both advantages and disadvantages to a funeral insurance plan versus other non-insurance options, and each option may be appropriate for different customers in different circumstances. We think it’s important that people get their own information and decide what option is right for them.
Many Australians just don’t have the money immediately available to pay for the cost of a loved one’s funeral and other related expenses. Taking out Funeral Insurance with Insuranceline is a way of making sure your family won’t be left looking for funds at a tough time. Insuranceline provides the money fast, usually within 24 hours of receiving completed claim requirements.
1. What’s the difference between funeral insurance and funeral bonds/ pre-paid funerals?
Funeral savings plans, funeral bonds and pre-paid funerals are options for people able to afford the initial up-front payment – which can be as much as one-third of the value of the funeral being purchased. The balance is then payable in instalments over a limited period of time. If a customer dies before the full amount has been paid or invested, the family will only get back what has been paid in.
Funeral insurance spreads the cost of the cover over many years and means it’s not necessary for people to pay a large up-front investment to establish the plan.
With a funeral insurance policy, payment of the full cover amount is guaranteed for accidental death in the first 12 months of cover, and for any cause of death after that time – no matter how much (or how little) a customer has paid in premiums. Insuranceline also provides double the cover amount if the death is a result of an accident while premiums are being paid for funeral cover.
2. Can customers end up paying more in premiums than the benefit amount?
With our Level Advantage option, customers will never pay more in premiums than their cover amount if they don’t make changes to their policy.
With our Level option, customers who hold a policy for a decade or longer, could only pay up to twice the amount of their cover amount in premiums (unless they make changes to their policy).
Our experience shows, however, that most funeral plan claims are paid many years before the customer gets to the point of having paid the same in premiums as their benefit amount. In fact, our data shows that the time customers are most likely to make a claim is one to two years after taking out their policy. On average, those people will only have paid around $1,000 in premiums but receive over $7,000 in benefit payment.
3. Why do premiums increase as a customer gets older? What are stepped premiums?
Our new product only offers level premiums. This means that the premium you pay when you first take out the policy will remain the same for the life of the policy.
Previously, as is the industry norm, premiums took into account the likelihood of a claim being made by age, so, as a customer got older, the cost of cover would increase (this is known as stepped premiums).
For a substantial portion of our customers, the stepped premium option was favoured as it offered a lower premium in the beginning. Level premiums meant that the customer paid more from the outset of the policy but premiums then didn’t increase with the customer’s age. Some of our customers over recent years have told us that the stepped increases can be difficult to manage at older ages. We’re concerned about long term affordability for our customers, so Insuranceline has made level premiums the new standard.
4. What if customers can no longer afford their premiums?
To keep cover affordable, Insuranceline offers a number of options to our existing customers. We recommend if our customers are concerned about losing their cover, that they contact us and talk about what we can offer them.
1300 880 750 8am – 6pm (AEST) Monday to Friday
5. Who makes sure Insuranceline (which is backed by TAL) is looking after the interests of customers?
Like all insurance companies in Australia, we are regulated by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC). We are also a member of the Financial Ombudsman Service – a free and independent service for consumers who have complaints about insurance policies.
TAL Life Insurance’s Insuranceline brand offers funeral insurance direct to customers in addition to other forms of life insurance. Insuranceline is proud to provide the peace of mind our products and service offer our customers. We aim to meet the needs of all Australians and their families.