Money & Banking
Should you get funeral insurance?
It’s something no one likes to think about, but not planning ahead for your funeral can lead to financial strain for your family. During a time of grieving, the last thing they should be thinking about is how to cover the cost of a funeral.
Funerals can cost up to $15,000, and if you should pass unexpectedly, this cost will be left up to your loved ones to bear. This poses the question: should you consider funeral insurance?
There are two types of funeral insurance to consider – The first option, Standard, is cheaper in premiums, but with no cap, it could have you paying up to 200 per cent of the cost of a funeral over time. With the second option, Level Advantage, you will never pay more than the price of a funeral but you’ll pay higher premiums.
Each type has its advantage – If your family’s life expectancy is long but you’d like to be prepared, the Level Advantage might make sense for you. If you’d like to pay lower premiums in the short term, then the Standard insurance might be a good option.
It is worth noting that in either situation, starting premiums increase in price the older you get, so you won’t necessarily save if you decide to push off getting coverage.
So in short, is funeral insurance worth it? – In all actuality, it depends entirely on when you die. If you died five years after taking out your policy, your family could get back far more than you spent. If you live another 20 years, it might not be worth the investment depending on your chosen type of coverage.
Alternatively, you could open a savings account and grant a family member power-of-attorney in order to withdraw your savings at the time of your death, but this poses the risk of not having saved enough in the event of a sudden passing.