Skip to Content (Press Enter)
All Funeral Insurance Articles

Planning • 4 min read

Prepaid funeral plans vs Funeral Insurance

Not sure about the difference between a prepaid funeral and funeral insurance? We've broken down the differences for you.

A funeral can cost up to $15,0001, so being financially prepared for your funeral spares your loved ones from an expense they might not be able to afford.

Prepaid funeral plans and Funeral Insurance can both give you the freedom to choose your own funeral and help relieve the financial burden for those left behind.

But there are differences to be aware of before you make your choice:

Prepaid funeral plan

With a prepaid funeral plan you choose exactly what kind of funeral you want. Then you pay for it either upfront or by instalments over a fixed period of time. Funeral directors and some insurance providers offer prepaid funeral plans.

Generally, a prepaid funeral plan only covers your funeral costs with no extra payout for accidental death.

If you die before you’ve finished paying off the funeral plan then your loved ones may still be responsible for the remaining cost.

Funeral Insurance

Like other forms of insurance, you pay regular premiums for your Funeral Insurance based on the cover amount you select.

Insuranceline is the longest-standing provider of Funeral Insurance in Australia, and there are many benefits to Insuranceline Funeral Insurance cover:

  • You’re covered immediately if you die from an accident, and after 12 months if you pass away from other causes. Your family could access up to $15,000 within 24 hours of an approved claim.
  • 10% more Funeral Insurance cover at no extra cost after 5 years thanks to Insuranceline Bonus Cover.
  • The Insuranceline 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 total Funeral Insurance premiums paid—whichever is greater.
  • If you’re 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 Funeral Insurance premiums paid.+
  • Premiums don’t go up just because you get older.++
  • Early Payout Option—after you turn 85 you can cash in your policy and receive 120% of the average Funeral Insurance cover amount, without Bonus Cover.#
  • An unexpected, accidental death can place extra financial strain on a family—Accidental Death Cover can be added to your Funeral Insurance benefit to provide extra financial support.

Compare ways to pay for your funeral

An affordable solution

Insuranceline Funeral Insurance can be yours for as little as a few dollars a week (depending on your age and cover amount selected).

Keep your premiums up to date and we'll:

  • Cover you for life and pay out fast—generally within 24 hours of receiving a valid and complete claim.
  • Pay claims for any cause of death after the first 12 months.
  • Accidental Death covered at any time so long as premiums are paid when due.
  • Refund the Funeral Insurance premiums you’ve paid for a death that is not accidental during the first 12 months of cover.

Find out more with our Funeral Insurance articles or get a quote for funeral cover today.


Important information

This article is a summary and is current at the date of publication. It is not legal advice. The law can change and how it applies to you often depends on your circumstances. If you need legal advice, seek the services of a lawyer who specialises in giving advice on the topic you need advice about.

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.

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

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.

++ The premiums may change if you make changes to your Policy or if the underlying premium rates are changed by us. However, you will never be singled out for a premium rate increase.

# 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, Extra Accidental Death and Accidental Injury Cover. The Early Payout Option may affect entitlements to the age pension and other government benefits.


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.

The ways in which Insuranceline collects, uses, discloses and secures your personal information are set out in the Insuranceline Privacy Policy, which is available free of charge on request.