Funeral insurance can seem like a confusing topic when you’re trying to decide if you need it and also try to cut through all the financial jargon. We’ve simplified everything for you so you can make an informed decision. Essentially, if you’ve been thinking about what your family would do financially when you pass away, then you’re in the right place. So, let’s get started…
What is funeral insurance?
Funeral insurance in New Zealand is a type of insurance policy designed to help cover the costs associated with a funeral. It provides financial support to the policyholder's loved ones or estate to cover the expenses related to a funeral and other end-of-life costs.
Funeral insurance is essentially a product that protects your loved ones by offering financial assistance during a difficult and emotional time, when they need to cover the costs associated with your funeral and other related expenses.
It can also bring peace of mind for both you and your family, knowing that you have a funeral insurance policy in place.
How does funeral insurance work in New Zealand?
It works by having the policyholder pay regular premiums to put an insurance policy in place. In the event of the policyholder's death, a lump sum payment is provided to their beneficiaries or estate. This sum could cover the various expenses associated with a funeral, including costs for the funeral director, casket or urn, burial or cremation, and transport of the deceased.
One key advantage of funeral insurance is that it typically offers quick access to funds, with claims being processed and paid out swiftly, usually within days.
How much does it cost?
The cost of funeral insurance can vary significantly based on several factors, including your age, smoker status and the amount of coverage you want. These are discussed further in this article.
How do I decide how much coverage I need?
When deciding how much funeral insurance you need, there are several factors to consider. First, think about the cost of your funeral, which may include expenses like funeral director fees, casket or urn costs, burial or cremation fees, and other related costs. Make sure to consider any outstanding debts or financial obligations you want the insurance to cover.
Also, consider your family's financial situation and your own savings. The goal is to ensure that the insurance coverage is enough to relieve your loved ones of the financial burden associated with your funeral and related expenses. It's wise to strike a balance between having adequate coverage and avoiding over-insurance, which can result in higher premiums than necessary. Assess your unique circumstances and financial needs to determine the appropriate level of funeral insurance.
What costs are typically associated with a funeral?
Funerals and the associated planning come with several costs. The core expenses often include the services of a funeral director, who manages various aspects of the funeral, including transporting and preparing the deceased, arranging the ceremony, and providing support to the family. The choice between burial or cremation brings additional costs, such as cemetery plots, headstones, or crematory services.
Funeral ceremonies can include costs for things like venue rental, officiant or celebrant fees, and various memorial items like flowers and printed materials. Other expenses include legal fees for obtaining death certificates, transportation of the deceased, and, in some cases, catering for post-funeral gatherings. Overall, the total cost can vary significantly based on location, cultural and religious customs, as well as personal preferences. So, it’s essential to plan and budget carefully to ensure an appropriate send-off.
Benefits of funeral insurance
Funeral insurance provides several benefits to policyholders and their families, including:
- Financial Support: Funeral insurance offers financial assistance to help cover the expenses associated with a funeral, relieving the family of the financial burden during a challenging time.
- Coverage Flexibility: Policyholders can choose the coverage amount that suits their needs, ensuring that their specific funeral expenses are adequately covered.
- Peace of Mind: Funeral insurance offers peace of mind, knowing that your family won't face financial challenges when arranging your funeral. This allows them to focus on the emotional aspects of the grieving process.
- Tax-free, lump sum payout
With these benefits, we aim to bring you peace of mind, knowing your loved ones will be looked after during a difficult time.