If you’re looking for an insurance policy to help your family in the event of your passing, then you may have asked yourself: do I take out life insurance, funeral insurance – or both? The answer depends on your needs and the needs of your family.
Life and funeral insurance are similar in many ways. Both require you to pay regular premiums and both will provide your family with a payout upon your death
However, there are still some key differences between the two insurances. These are mainly to do with eligibility, the level of cover on offer, and what the payment is intended to be used for. Understanding these differences will help you decide what kind of insurance is best for you and your family.
Generally speaking, funeral insurance is available to any adult that fits the age requirements for taking out a policy that is outlined by the insurer. With Insuranceline this is 25 to 80. Often it can cover you, your spouse and other members of your family all on the same policy.
Eligibility for life insurance, on the other hand, is usually based on factors like your age, medical history, whether you smoke and other health-related issues. These factors affect whether you are able to take out a life insurance policy and what your premiums will be.
While it can be used to cover debts or make other payments upon your death, funeral policies usually have a maximum cover amount of $15,000 and the payout is intended to be used primarily towards the cost of a funeral.
With life insurance, you’ll generally be insured for a higher amount of cover compared to funeral insurance. That’s because life insurance is principally designed to provide financial support to your beneficiaries in the event of passing. This could be in the form of assisting with mortgage and bill payments, education fees and any other life expenses your family wish to use the money for.
A funeral insurance policy could be right for you if you need to plan only for the cost of your funeral, but don’t need to support anyone on an ongoing basis.
You might choose to buy a life insurance policy for the long-term financial security of dependents, like children, a spouse or family members who rely on your income to get by, in the event of your passing.
Ultimately, the best form of insurance, and what you should buy, will depend upon your personal circumstances.
To understand which insurance could be best for you, call Insuranceline’s insurance experts on 13 77 87 and they'll help guide you through the decision process to ensure you are able to make an informed decision.