Seniors Funeral Insurance
Funeral Insurance for seniors pays a lump sum amount to your beneficiaries when you pass away, allowing you to prepare for the cost of your final expenses, so your loved ones won’t have to.
Published August 10, 2017
What You Need to Know
As you get older, you start to focus more on what matters most, your family. More specifically, ensuring your family will not be left with the financial burden of paying for your outstanding debt or funeral.
Get peace of mind by planning ahead. This article will help you understand what seniors need to consider when comparing option to fund their funeral costs. We’ll look at your options based on your age, your financial situation and your health.
Senior funeral insurance will help ensure your family is able to give you a dignified farewell. With a lump sum pay out of up to $15,000, your beneficiaries can cover your final expenses. There are a variety of funeral cover options for pensioners to choose from. However, capped funeral insurance is far better than the older style none capped policies.
Funeral insurance for pensioners
Funeral insurance for pensioners needs to be affordable for the long term, as income from the age pension or other pensions generally don’t increase as you get older. Therefore, pensioners should consider funeral insurance policies with level premiums that are capped, ensuring you don’t pay more in premiums than the policy pay-out.
What you need to know about funeral cover for senior citizens
Funeral cover for seniors come in many forms, including Funeral Insurance, Prepaid Funerals, Funeral Bonds, Savings, remnants of your Superannuation or leaving it up to your family to cover the costs. Either way, the earlier you start preparing, the more options you’ll have because funeral insurance is usually only available to people under the age of 70.
General Age Eligibility for the different options
| Entry age for eligibility | Funeral Insurance | Life Insurance | Funeral Bonds | Pre-paid funerals |
| 50 to 59 | ||||
| 60 to 69 | ||||
| 70 to 75 |
(Depending on insurer) |
|||
| 76 to 79 |
(Depending on insurer) |
|||
| 80 years or older |
The Pros and Cons of each option
| Benefits | Funeral Insurance | Life Insurance | Funeral Bonds | Pre-paid funerals |
| Quick payouts |
(Funeral Advancement Portion only) |
|||
| Easy to buy. | ||||
| Premiums are capped – you won’t pay more than the cover amount. |
(Depending on insurer) |
|||
| More control over planning your future funeral, e.g. choice of funeral director. | ||||
| Keeps up with inflation to ensure the lump sum is enough to cover final expenses. | ||||
| No medical examination. | ||||
| The agreed lump sum benefit will be paid, even if premiums / payments or income has not yet passed sum insured / cost of your proposed funeral. |
Seniors: 10 Features to focus on when selecting a funeral insurance policy for you
Your answers depend on your financial situation, age, health and medical history.
1. The cost of a funeral
To know how much cover you need, you first need to determine what type of funeral you want, for example, cremation is less expensive than a burial service. It’s also important that you’ve shared these details with your loved ones.
2. Short term & long term affordability
Every policy offering is different, so you should consider both short term & long term affordability. As a senior on an Age Pension or Annuity, your income may be limited, consistent or diminishing. Therefore, consider policies that offer capped premiums.
3. Premium options
Senior citizens should ideally choose policies that offer level premiums, which start off higher, but generally do not increase every year due to your age (excluding inflation).
4. Entry Age restrictions
Consider the age at which you are still eligible to take out a policy, as well as the age at which your policy may expire, for example, if you’re 75 you should probably not buy a policy that expires at age 80. Look for policies without expiry ages.
5. Discounts or Built-in options
Look for a policy that offers additional benefits, such as discounts for covering multiple people, or free will kits and or any other benefits relevant to you.
6. Payment options
Many insurers reward seniors for paying their premium in an annual lump sum, instead of fortnightly or monthly payments. You might receive a discount of 5-8% due to reduced administrative costs.
7. Cover Indexation
Generally a built in feature increases your level of cover by 3-5% each year. While this may suit some people, you should have the ability to stop these increases if you don’t want your sum insured and premium to increase.
8. Short Accidental Death Period
Consider policies that have a short accidental death period of 12 months (or if replacing an existing policy that provides no Accidental Death period). As longer accidental death periods will make it harder for you to claim.
9. Guaranteed acceptance
Funeral policies with guaranteed acceptance, meaning no medicals required during application stage, are more expensive, but your health or pre-existing medical conditions will not cause you to be rejected.
10. Worldwide Cover
You want to ensure that the policy offers you cover 24 hours a day, seven days a week worldwide. Ensuring your travel plans won’t affect your eligibility to claim.
It’s important that you consider these 10 features when comparing insurance options. Seniors funeral insurance options can be limited the older you get, therefore, best to shop around to compare multiple offers before selecting the right policy for you.
What to avoid
Cancelling when you need it most: Keep in mind, when looking for funeral cover you want to choose an option that will allow you affordability, even when you’re older than 80.
Long accidental death periods: Avoid policies that have long waiting periods (two plus years), as you are more likely to die from natural causes when you reach a certain age, than from an accident.
Stepped Premiums: Avoid funeral insurance that only offers stepped premiums, which may start off more affordable, but increases as you age. Stepped premiums may force you to cancel your policy when you need it most because it becomes too expensive. Before ASIC recommendations, the average annual premium for senior citizens was:
| Age | Average annual premium |
| 50 to 54 years | $375 |
| 55 to 59 years | $425 |
| 60 to 64 years | $500 |
| 65 to 69 years | $625 |
| 70 to 74 years | $700 |
| 75 to 79 years | $975 |
| 80 years plus | $1,350 |
Source: ASIC
As is clear from the above table, there is a significant increase in premium pricing among people over 69 years old. Even more glaringly obvious, is the massive premium difference between 70-year-olds and people over the age of 80.
Because premiums are calculated using life expectancy, people could end up paying more in premiums than the cover amount. If you’re unable to keep up with the rising cost of premiums or you miss a payment, your policy could be cancelled and your cover, including everything paid thus far, will be lost.
To address these concerns raised by ASIC, a number of insures have introduced policies with capped funeral insurance premiums. Meaning, you’ll never pay more for your policy than the cover amount.
Funeral insurance for over 80 year olds
Funeral insurance for over 80 year olds is very expensive because the older you get, the higher the risk of you claiming for funeral cover. Which makes sense, seeing as Australia’s life expectancy has been steadily rising since 1970? The average life expectancy for Australians, as of 2014, was 82.25 years.
There are a number of more affordable ways you can pre-fund your funeral, including funeral bonds, pre-paid funerals and savings. Another option you might want to consider is having your adult children take out a funeral policy for you.
Funeral cover for parents
Taking out funeral cover for your parents is a good option when they live on a fixed income, and you can afford to pay the premiums on their behalf. Often you can elect yourself as the policy owner and beneficiary to help the ongoing administrative side of things which will also make the claiming of the final benefit payment easier.
Funeral insurance in Australia can be very expensive for people over 65. Retired seniors can benefit from knowing their loved ones will be able to pay their final expenses when shopping around and comparing funeral options before retirement age.
I was eighty last March. I am a fit person and live in a retirement village. I am looking for Funeral insurance, Can you help me?
I would be prepared to backdate the premiums if that was acceptable.
Hi Stephen,
I’m glad to see you’re planning ahead. Death is not a pleasant thought, but nonetheless, it is our reality.
In order for us to help you review your options and find the right funeral cover for your specific requirements, we need a little more information.
Please fill in the form above and a consultant will give you a call shortly or call 1300 135 205.
My father is 81 years old and in a nursing home. He is on Aged Pension, so income is limited.
I am a single parent and don’t have the income to cover my own family, let alone pay for a funeral.
I am worried that my father will pass away at any time. What are my options?
Hello Swan,
I can understand your concern.
To cover the cost of your father’s funeral you generally have a few options, other than funeral insurance:
• You might be able to purchase funeral cover for your parents by adding them to your life insurance policy.
• A funeral bond can usually be used to save for your father’s funeral. You can choose the amount you want to be invested.
• Pre-paid funerals is a contractual agreement between you’re and the funeral director and can usually be paid for in a lump sum or regular installments.
• Start saving immediately in a separate account set aside for this specific circumstance.
• If your father is getting a pension from Centrelink, he might be entitled to a bereavement benefit. It’s best to contact them directly.
Hi, my dad is looking for funeral cover. He is 81 years old. Can he get cover?
Hi Robyn,
Generally, you need to be younger than 80 to be eligible for funeral insurance. However, there are other ways your dad can cover the cost of his funeral, including:
• Funeral bonds.
• Pre-paid funerals.
We have life insurance, stepped premiums, covering each of us for $25000. The premiums are getting quite horrendous. We’re pensioners on a fixed income. Aged 73, a reformed smoker, over 12 months ago, and 69 never smoked. What are our options?
Hi Ray and Sheil.
Life insurance for seniors can be a bit tricky. However, as you are still under the age of 75 finding affordable cover is not impossible, especially since you haven’t smoked in 12 months. Please give us a call on 1300 135 205 so a specialist can assist you with your query.
I Annette Lester wish to cancel my policy with
you, I have decided to stay with my current
Funeral Insurance.
Hi Anette.
Please send an email to info@lifeinsurancedirect.com.au with your cancellation request. Be sure to include your policy number. Alternatively, give us a call on 1300 135 205.
Can I please get funeral insurance for someone that is over 84?
Hi Nellie.
Funeral insurance for seniors over the age of 80 is generally very rare. However, there are other options you might want to consider, for example, investing in a funeral bond or pre-pair funeral.
Best of luck.
I am 83 physically fit with no children and would like to get a quote on funeral expenses for a cremation in Sydney eastern suburbs.
Hi Dierdre,
Thank you for reaching out to us. While we genuinely appreciate your consideration, we would like to clarify that we only offer general advice and do not provide funeral cover or specific quotes for funeral services.
However, we understand the importance of planning for such matters, especially for individuals like yourself who value being prepared. We recommend contacting local funeral service providers or conducting an online search to find reputable funeral homes in Sydney’s eastern suburbs. They will be able to assist you in obtaining the necessary information and provide accurate quotes tailored to your specific requirements.