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Planning • 7 min read

Compare ways to pay for your funeral

There are a few different ways to pay for a funeral and we've explained some of them here.

When you’re getting on with life, thinking about your funeral expenses is probably the last thing on your mind. Yet you may be surprised to learn how much the average funeral costs these days. Even the most modest service can be expensive, starting from $4,000 for the essentials up to $15,000¹ for something more elaborate. It’s not so surprising when you consider all the different elements that may need to be arranged:

  • Casket
  • Service (chapel or venue hire)
  • Funeral director’s fees
  • Crematorium costs or burial plot
  • Flowers
  • Memorial booklet
  • Transportation

That’s before you start thinking about the kind of wake you’d like, which can be anything from a few drinks at the local to a big affair requiring a venue, catering, and an event organiser. Sorting out your funeral expenses in advance is just another great thing you can do for your loved ones. If you want to make it easier for them, you have several options: some of these include taking out Funeral Insurance; pre-paying your funeral with a lump sum or regular instalments; or buying funeral bonds. Let’s look at how these different options can work:

Funeral Insurance

Funeral Insurance is one way to ensure your funeral can be paid for. Like other types of insurance, you pay regular premiums (ongoing payments) for a fixed amount of cover (usually between $1,000 and $15,000). The cover amount is paid to your beneficiary (the person you want the money to go to) when you die.

Funeral Insurance policies can vary a lot between providers, so it’s important to find out as much as possible about the plan you’re considering before you sign up. This can be a bit of a minefield if you are new to the whole thing. When researching Funeral Insurance, there are a few important questions you should ask your insurer.

Find out if the premiums (regular payments) will increase over time

With some insurance companies, your premiums may increase each year as you get older. With Insuranceline, the cost is based on your age when cover starts, and generally stays the same from year-to-year, even as you get older. It will change if you make changes to your Policy, such as increasing the Cover Amount, adding optional benefits, or adding other people to your Policy. The premium will also change if we change the premium rates for our Funeral Insurance portfolio. If we change the premium rates, we will provide you with at least 30 days' notice.

Check to see how long the insurance payout will take to come through if you need to claim

Depending on what is required to make a claim, an insurance payout could be delayed. You really shouldn’t have to wait long and with Insuranceline, you’ll generally receive a payout within 24 hours of sending in a complete, valid claim.

Can I change my mind once I’ve purchased a policy?

You should always be able to feel comfortable with your decision and a cooling-off period is something all insurers have to offer. Some insurers may offer 14 days but at Insuranceline you’ll have the time you need to make extra sure you want to continue with the policy with a 30-day cooling-off period.

Is it possible that I’ll pay more in premiums than will be paid out at claim time?

With many insurance products, it’s possible that you may pay more in premiums than you are covered for. Our Value Promise means that at the time of a claim for the Funeral Insurance Benefit, we’ll pay the Funeral Insurance Cover Amount, plus any Bonus Cover, or 100% of the premiums paid toward your Funeral Insurance cover—whichever is greater.  

If you are looking for a lower-cost option, you may choose a 70% Value Promise so that at the time of a claim for the Funeral Insurance Benefit, we’ll pay the greater of the Funeral Insurance Cover Amount, plus any Bonus Cover, or 70% of the premiums paid toward your Funeral Insurance cover.+

What if I cancel my cover?

Many Funeral Insurance policies will generally work like other insurances, which means that if no claim is made, or if you cancel your cover before a claim is made or you are able to cash in your policy, you may not get anything back. Because of this, it is important to consider the long-term affordability of any cover you take out, to make sure it is a suitable product for the long run. It's important to remember that insurance is not the same as—or a substitute for—saving money, and that depending on how long you live for, you might need to pay premiums for a long time. 

Insuranceline offers a 30-day money-back guarantee (Cooling-Off Period) from the date you purchase your Policy, giving you time to go over your Policy and make sure it’s the right one for you.

There are no hidden catches—cancel your Policy within 30 days of the Policy Commencement Date and you’ll get a full refund, provided you have not made a claim under the Policy. If you do cancel your Policy after 30 days, you may not receive your money back. Funeral Insurance works like your car and home insurance—it’s not a savings plan and has no cash value. 

We also offer an Early Payout Option. After you turn 85 you can choose to cash in your policy and receive 120% of the average Funeral Insurance Cover Amount, not including Bonus Cover.#

Pre-paid funeral

With a pre-paid funeral, you can plan and pay for your funeral in advance and lock in the cost at today’s prices. You can also choose to pay up front and leave the details of the funeral service for your family to decide on later.

There are usually two payment options—either pay in full with a lump sum or pay in instalments. If paying in instalments, an initial payment may be required upfront. It’s best to shop around as funeral directors offer different packages—ask for a full description of the costs to see exactly what you are paying for.

The downside is that it may be difficult if you move away or interstate or want to change your funeral plans later—check if you can transfer before you sign up.

Funeral bond

A funeral bond is another way you can help meet the costs of your funeral. Funeral bonds are like an investment that can only be withdrawn after your death. You can invest in a bond either directly through an investment company or from a funeral director.

The bond you pay is an investment towards the cost of your funeral, but doesn’t guarantee against rising funeral prices, so it may need to be topped up by your family. If you need, you can usually pay for the funeral bond in instalments, but make sure you understand all the costs and read the bond's prospectus carefully before you decide. The good news is that money invested in a funeral bond is not subject to the asset or income test for the Age Pension if certain conditions are met.

There are also other options 

Funeral Insurance, pre-paid funerals, and funeral bonds are not the only ways you can help your loved ones to be financially prepared for your funeral. You can also put aside money for funeral expenses, such as by setting aside a lump sum or saving smaller amounts regularly. 

Make sure you understand any steps your loved ones will need to take to access this money when you pass away, and discuss these with them, so they will know what to do when the time comes. 

What's next?

Not many people like thinking about their own funeral but if you do want to sort it out in advance, there are several options so make sure you check them all out carefully and decide what the best one is for you.

Read more about Funeral Insurance from Insuranceline or call us on 13 77 87 and we’ll be happy to answer all your questions.


Important information

Cover under the Funeral Insurance Benefit is for Accidental Death only for the first 12 months of cover, including for any increases. Accidental Death has a special meaning in the PDS and some causes of death are excluded during this time—please refer to the PDS or call us for further details. After the first 12 months, the Funeral Insurance Benefit provides cover for all causes of death.

+ Highest payout is paid on receipt of a valid claim and is calculated on your Funeral Insurance Cover Amount or premiums paid toward your Funeral Insurance cover. Read more about the Insuranceline Value Promise in the PDS.

# After the Policy Anniversary following a Life Insured reaching age 85, the Policy Owner can cash in the policy and receive a payout of 120% of the Life Insured’s average Funeral Insurance cover amount, excluding Bonus Cover, Accidental Death Cover. The Early Payout Option may affect entitlements to the age pension and other government benefits.

1 Source: Paying for your funeral - Costs are estimates only and vary depending on state, and the services and features chosen.

Backed by TAL

^Insuranceline Win 1 of 5 $1000 Visa Cards (Competition). Subject to the Terms and Conditions, the Promotor is offering customers a chance to win one of five Digital Visa Gift Cards valued at $1,000, in one of the four draws. Entry commences on the 1st of April 2024 and will run for four months until 11:59pm AEST on the 31st of July 2024 (Entry Period). During the Entry Period, to be eligible to participate in the Competition, customers must get a quote and take out a new Insuranceline Life Insurance, Income Protection Insurance, or Funeral Insurance policy to enter the Competition. A maximum of one (1) entry into the Competition will be awarded per eligible policy. The Promotion is not open to existing customers, or customers who have cancelled a Promoter branded policy in the 12 months prior to the commencement of the Entry Period and then taken out a new Insuranceline branded policy. Each of the four Prize Draws will take place at Level 16, 1 Denison Street, North Sydney NSW 2060 on the respective Prize Draw and Time, as listed in the table in Condition 13 (and if any Redraws if there are any unclaimed prizes, Condition 19) of the full Terms and Conditions, and the winners will be sent an email and will be attempted to be notified via phone within two (2) business days of the Draw and published on Max. retail value of the total prize pool is $20,000. To be eligible at time of the draw, customers must still have an active policy and have paid 1 month of premiums in full. View eligibility criteria and full terms and conditions here. Promoter: TAL Direct Pty Limited ABN 39 084 666 017 AFSL 243260. Permits: NSW NTP/09255, ACT TP24/00483, & SA Licence No. T24/388.

**Bonus 10% more cover is calculated on the fifth anniversary from the Policy Commencement Date. Each adult life insured will have an extra 10% of the average Funeral Insurance Cover amount held during the previous five years added to their Funeral Insurance benefit. Terms and conditions apply. Refer to the PDS for more information.

#Claims paid figures relate to all Insuranceline life insurance policies in the 2021 financial reporting year (1 April2021 to 31 March 2022). All claims on Insuranceline policies are assessed against the relevant policy terms and conditions. These terms and conditions, as well an explanation of the claims process, can be found in the applicable Product Disclosure Statement. Claims are administered and settled by the insurer, TAL Life Limited.

***Insuranceline is the longest standing provider of Funeral Insurance in Australia, based on: Strategic Insight, Actuaries & Researchers. Funeral Insurance means a policy with periodic premium payments that provides a lump sum to help pay for funeral and associated expenses when you die and excludes pre-paid Funeral Plans and Funeral Bonds.

The information provided on this website is general advice only which means it does not take into account your individual needs, objectives or financial situation. For this reason, you should consider whether it is appropriate for you, and before you decide to buy or to continue to hold an insurance product, you must read the relevant Combined Product Disclosure Statement (PDS) and the Financial Services Guide (FSG). The PDS/FSG contains important information which will help you understand the product, including what's covered and what's not covered and to decide whether it is appropriate for you. The Target Market Determination (TMD) for the relevant product, where applicable, is also available.

If you are considering cancelling a policy you already hold in order to replace it with a new policy, make sure you read the terms and conditions of both policies before you make a decision. The cover terms may be different, you may lose benefits accrued under your existing policy, and waiting periods may apply to the new policy. Changes in your personal circumstances (such as your age, health, and employment) that have occurred since your existing policy was originally taken out may also affect your new policy. As your application for a new policy may not be accepted, and some policies may be unable to be reinstated after they have been cancelled, you should consider waiting until your new policy is confirmed before you cancel any existing cover.

Promoted by Insuranceline, a trading name of TAL Direct Pty Limited (of Level 16, 363 George Street, Sydney NSW 2000) ABN 39 084 666 017 AFSL 243260. TAL Life Limited ABN 70 050 109 450 AFSL 237848 issues the life insurance benefits. St Andrew's Insurance (Australia) Pty Ltd ABN 89 075 044 656 AFSL 239649 issues the Involuntary Unemployment Cover.

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