Funeral Advancement
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How does it work?
Funeral Advancement is not an extra payment in addition to your life insurance. Instead, it is an early release of part of your policy’s sum insured. The aim is to provide beneficiaries with access to funds quickly when they need them most.
In most cases, insurers release the Funeral Advancement Benefit within 5 to 10 business days once the required documents are submitted. These documents generally include:
- Death certificate A certified copy of the death certificate
- A treating doctor’s medical report
- A completed claim form
- Any additional information requested by the insurer
The full life insurance benefit usually takes longer to process, sometimes several weeks depending on the circumstances. Funeral Advancement ensures families are not left waiting to cover urgent expenses.
Why should I use the Funeral Advancement Benefit?
The benefit is designed to help cover any immediate funeral costs and is put in place so your beneficiaries can receive some money as soon as possible.
Generally, once the relevant documents are submitted to your life insurance company, the funeral advancement benefit will be paid in a much shorter period of time.
Having this benefit built-in can reduce the need to have a separate funeral insurance policy which will only cost you more.
How much will I receive?
The amount you receive will differ depending on your insurer. Generally the amount you receive will be either a certain percentage of your sum insured or it may be a set cash amount and may range between $15,000 and $20,000.
Other insurers may pay you the lesser of the two amounts such as the lesser of $20,000 and 25 per cent of the amount insured.
When comparing quotes from different insurers, you should ask one of our specialists how much is payable.
How long does it take for a funeral insurance claim to be paid?
During the claims process you will be required to provide documentation and evidence such as a death certificate as proof that the life insured has died. This will need to be submitted along with a claim form to your insurer.
Once all necessary information has been received by your insurer, the funeral insurance claim will be assessed. This can take up to 5 working days before you may receive the proceeds. However please note that this process cannot start until all relevant documentation is received.
Frequently Asked Questions and Answers
Is Funeral Advancement included in all life insurance policies?
Not all policies automatically include this benefit. Most major Australian life insurers build it in as a standard feature, but it’s important to confirm when comparing policies. Some lower-cost or group-superannuation policies may not offer funeral advancement, meaning your family could face delays covering funeral costs.Can Funeral Advancement be used for expenses other than the funeral?
Yes. While it is primarily intended to cover funeral and burial expenses, the funds are generally paid directly to your nominated beneficiaries. They may use the benefit for related costs such as memorial services, travel expenses for family members, or immediate living expenses during the claims process.How is Funeral Advancement different from Funeral Insurance?
Funeral Advancement is an early payout of part of your life insurance sum insured, whereas funeral insurance is a separate standalone policy with its own premiums. Funeral Advancement usually comes at no extra cost within your life cover, while funeral insurance often has higher long-term costs. Many people find that funeral advancement provides enough support, making standalone funeral insurance unnecessary.What happens if the Funeral Advancement benefit is less than the funeral cost?
If the advancement doesn’t fully cover funeral costs, your beneficiaries may need to use other funds until the full life insurance claim is settled. However, many insurers set the advancement amount ($15,000–$25,000) at a level intended to cover most standard funerals in Australia.Will claiming Funeral Advancement delay the full life insurance payout?
No. Funeral Advancement is assessed separately and usually processed quickly once key documents are provided. The remaining life insurance claim follows the normal process. Claiming the advancement does not cause delays, it simply ensures funds are available faster for urgent needs.
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When is the funeral advancement benefit paid following the Insurance Company being notified of the life insured passing away?
Thanks for your question John. The funeral advancement benefit is generally paid within 2 weeks of submitting the completed claim forms back to the Life Insurance company. It is imperative that the forms are returned quickly in order to expedite this payment especially if these funds are required for the associated funeral costs. It is important to note that payment of the funeral advancement benefit does not automatically imply that the Life Insurance benefit will be paid as that will proceed through the normal claims process and checking procedures before the benefit is paid.