Cheap Funeral Insurance

Expensive funeral arrangements can be avoided when purchasing the right funeral insurance policy. First, you need to find a policy you can afford to keep for the long run. Consider what you’ll be able to afford each month, both now and in the future.

Cheap funeral insurance is defined by its long-term affordability. You should never be in a position of having to cancel your policy because you’re struggling to continue paying the monthly premiums. Remember, the lowest premiums do not necessarily mean the best cover. Finding the cheapest funeral insurance that also provides value requires thorough research and the reading of your policy terms and conditions.

Let’s take a look how you can find cheap funeral insurance and the ways to keep your premiums affordable.

Consider long term vs. short term affordability

Ideally, you want the cheapest funeral insurance that will also cover all your funeral expenses. Your premiums will vary depending on your level of cover, but also according to the premium structure, your insurer offers.

Stepped premiums

Stepped premiums are usually more affordable in the short term because you pay less at the start of your policy. However, premiums generally increase each year as you get older. Meaning, you might have to cancel your policy when you need it most – after retirement age.

Level funeral insurance premiums

Level funeral insurance premiums are generally more affordable in the long-term, because they start off higher, but do not increase due to a change in your age. If you want cheaper funeral cover for the long-term, consider a policy where your premiums remain consistent. Generally, if you can afford level premiums today, you’ll likely be able to afford them in future.

When choosing a policy, ask yourself if you’ll still be able to afford the premiums when you’re 60, 70 and 80+ years old.

If a funeral insurance policy is cheap – ensure you check the following:

  • Premium Type
    Check to see whether your policy offers you a choice between stepped and level premiums. Choose the option that’s best suited to your specific circumstances and needs.
  • Accidental Death Period
    Generally, insurers will only cover you for accidental death during the first 12 months of your policy. However, some companies increase this period to 24 and even 36 months. Make sure your policy has a short accident-only period.

Funeral insurance expiry age

Your funeral expiry date is the age at which your policy will end. Many funeral insurance policies continue for life. However, the expiry age depends on your insurer, and in the case of stepped premiums, you might not be able to afford your policy after a certain age.

Capped Premiums – What is capped funeral insurance?

Capped funeral insurance ensures you never pay more in premiums than what your funeral cover is worth. Your payments are essentially capped at your sum insured amount. This policy feature lessens the possibility that you’ll have to cancel your funeral cover because you can no longer afford to continue paying the premiums.

10 Ways to keep your premiums affordable:

number-1Only cover yourself for what you need

Don’t over insure yourself by taking out too high an amount or too many policies. You usually only need to take out adequate cover based on your requirements.

number-2Remove CPI increases from your policy

Take note, if you choose to remove the consumer price index (CPI) increases on level premiums, neither your premium nor your benefit amount will rise, meaning your cover amount might not be sufficient to cover all your funeral expenses when the time comes. Also, if you have a stepped premium style funeral policy, your premiums will still increase.

number-3Review your policy on a regular basis

It’s a good idea to regularly review your policy and make sure you’re still receiving value for money, and that the cover and lump sum you are insured for (on the renewal notice) remains appropriate to your current stage of your life.

number-4Gather quotes from different insurers and compare them online

Get a number of quotes from different insurance companies and compare similar products against one another – apples with apples. Make sure you consider the features, benefits and exclusions of each product and choose the one that is best suited to you and your family’s needs.

number-5Ask a specialist for advice

Policy documents and information can be very technical. Contact a specialist to explain and clarify specific terms so that you can make an informed decision.

number-6Have multiple people insured

When your spouse also takes out a similar policy with the same company you may receive a discount on your monthly premiums.

number-7Pay your premiums on a yearly basis

Many insurers offer discounts when you pay a yearly premium instead of monthly or quarterly because a lump sum reduces the company’s administrative costs.

number-8The first month Free

Some insurers offer the first month’s premium free of charge. Ask our specialists to assist you with this.

number-9Cashback after a certain amount of years

Select companies providing a cash back incentive when you’ve had your policy in force for a certain amount of years without cancelling, claiming or missing a payment.

number-10Consider alternatives

While insurance is a viable option to cover the cost of your final expenses, it’s not suited to everyone. There are alternative ways of saving for your funeral which may be particularly suited to seniors, these include:

  • Life insurance with built-in funeral advancement: Less expensive than funeral insurance, but benefits will likely take longer to pay out.
  • Funeral bonds: You can choose the amount to be invested and plan your funeral details upfront, but dividends could be less than anticipated.
  • Pre-paid funerals: You are eligible to apply at any age. However, you pay for your funeral at today’s prices, which might not be enough to cover the costs when you one day pass away.

Although cheap cover might be alluring, it’s useless if you can’t rely on the product. Instead, compare funeral insurance products to find the best cover for you and your family.

Published: November 15, 2017
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