Life Insurance Or Funeral Insurance

Edited by admin on Nov 07, 2018
Both life insurance and funeral insurance provide a lump-sum benefit in the event of death or terminal illness but both products still offer different benefits that will impact your decision of what option to go for.

Continue reading this guide for an idea of what each covers and what is right for you. Alternatively, you can get a quote for both from an expert.

Aside from the above-mentioned similarities, funeral insurance is very different to life insurance. The basic purpose of funeral insurance is pre-payment for your funeral expenses. Aside from the funeral expenses, there is no lump sum benefit which can be used for other purposes.

Life insurance can cover you for death, accidents and illnesses, depending on the type of life insurance policy you take out. The key difference between life insurance from funeral insurance is that you get a lump sum benefit that you can use for other purposes other than the funeral.

The question remains in your mind just like many other Australians who question the importance of having life insurance cover. Whether you get funeral or life insurance cover, here are some of the benefits you can get from it.

There are other benefits you can get from having insurance for you. Just remember that before you sign your name on the dotted line, read the fine print carefully so that there will be no unpleasant surprises or false expectations when you make a claim because of some misunderstanding.

Many super funds arrange life and disability cover to the members of the account. The insurance is organised by the trustee of the fund on behalf of the fund members and in the event of a claim the lump sum is paid to the trustee. The trustee will then determine how the benefit is paid to insureds estate. Many Australians sign up for the default level of cover provided by super funds as it is seen as a low cost option (due to policies being bought in bulk by the fund). While there are benefits to life cover through super, it is important to assess the level of cover you are entitled to receive and determine whether more comprehensive cover through a standalone policy may be necessary.

Over the past few years, the government has been reinforcing the message that people need to track down their lost superannuation from previous jobs and roll it all into one account to make it work harder for them. While most people are now aware of the need to do this, many still don’t realise that there may also be small amounts of life insurance money out there that they may be entitled to as well. It is estimated that there is at least $1 billion in benefits from lost or forgotten life insurance policies waiting to be claimed and that the average unclaimed benefit is around $2,000 per person. So it’s certainly worth looking for and in Australia, you can do so through the Financial Ombudsman Service. They offer a free life insurance policy search service, where if you are an authorised person (e.g. an immediate relative or spouse of someone you suspect to have a missing life insurance policy), they will request all life insurance companies that are members of the Financial Ombudsman Service to search their records on your behalf. Source: finder.com.au

It is a sad fact that Australia is currently facing a massive underinsurance problem with research commissioned by IFSA in 2009 indicating that over 95% of Australian families with dependents were underinsured¹. Many people are quick to insure either their car or home but finding adequate cover to protect the greatest asset of all is often neglected. The first step to take when assessing if you should take out coverage is to consider what the most important assets are in life and consider the financial stress that would be caused if you were suddenly no longer able to work or were no longer around to provide a steady flow of income to your family. Whether it be the birth of your first child or the purchase of your first home with your spouse, the moment that others become financially dependent on you is the moment you should consider taking out life cover. Source: finder.com.au