Although it’s never easy to plan for death, having a solid financial plan can help your loved ones cope. For those in Australia who wish to shield their loved ones from unforeseen burial costs, funeral insurance is becoming a more popular choice. Is it worth the money, though, or are there other options?
What funeral insurance is, what it covers, how much it costs, and if it’s the correct choice for you are all covered in this in-depth overview. In order to help you make an informed decision, we will also compare it to other savings methods and prepaid funerals.
Funeral Insurance: What Is It?
Funeral insurance provides a lump sum payment to your designated beneficiary upon your death. Your funeral expenditures, including those for a coffin, hearse, celebrant fees, flowers, cremation or burial, and other related services, will be covered by the settlement.
In exchange for your weekly, biweekly, or monthly premiums, your insurer usually promises a cash payout upon your passing. Australians between the ages of 40 and 80 can typically obtain policies, depending on the provider.
How Much Does a Funeral Cost in Australia?
Funeral expenses in Australia vary widely depending on the type of service, location, and preferences of the family. Here’s a general breakdown:
| Funeral Type | Average Cost (AUD) |
|---|---|
| Basic Cremation | $2,000 – $5,000 |
| Standard Burial | $10,000–$20,000+ |
| Premium Services (Burial + Wake) | $200–$600 |
| Death Certificate, Notices | $200 – $600 |
Depending on transportation, venue rental, wake meals, floral arrangements, and cultural or religious restrictions, these expenses may increase much more.
What is covered by funeral insurance?
Funeral insurance plans usually provide:
- lump-sum payment, typically ranging from $5,000 to $15,000.
- Paying quickly—typically in 1-2 business days
- Coverage for accidental deaths from the beginning
- After the first year, the terminal illness benefit
- Acceptance is assured (usually without a medical examination).
- Adaptable coverage levels according to your demands
- Though not all insurers provide it, it’s still worthwhile to check. Some policies also offer value guarantees, which ensure that you won’t pay more in premiums than the payment amount.
Funeral insurance benefits and drawbacks
- Coverage for unintentional death immediately
- There is no need for a medical examination.
- Families can receive immediate cash support.
- Assurance that loved ones won’t have to pay
Cons:
- You can pay more in premiums than the payout if it’s held for a long time.
- There are waiting periods for certain insurance (often 12 months for natural death).
- Age-related premium increases are common (unless you select a capped premium plan).
Do You Need Funeral Insurance?
Particularly if you’re elderly, don’t have any funds, or want instant accidental death coverage, funeral insurance may be worthwhile. However, it is mostly dependent on how long you intend to keep the policy.
The coverage becomes less cost-effective if you begin early and continue to pay for more than ten years because you can end up spending more than the true cost of a funeral. However, insurance provides a feasible option for elderly people in their late 60s or early 70s, or for those who cannot afford a paid burial in full.
Other Options Besides Funeral Insurance
In Australia, funeral insurance has a number of possibilities, each with advantages and disadvantages.
- Funeral Plans That Are Prepaid
This is the most popular option. By arranging and paying for your funeral in advance, you may lock in today’s costs and guard against future increases. A fixed charge, no recurring premiums, and the ability to tailor your service are the benefits. The requirement for either an upfront payment or recurring installments over a few years is a drawback. - Bonds for Funerals
An financial product that is managed is a funeral bond. Money is invested and only released for funeral expenses after death. Benefits: Centerlink-friendly earnings are tax-free when utilised for funeral expenses. The inability to access cash early and the lesser return compared to alternative investments are drawbacks. - Savings Account One easy fix is to open a special savings account. Just allocate money each month specifically for funeral expenses. Benefits: Complete financial control and adaptability. The drawbacks include the need for discipline and the potential for slow growth.
- Insurance for Life
Life insurance pays out more than funeral insurance and can be utilised for more than simply burial expenditures. perks include increased coverage and more perks. Drawbacks: Higher premiums and maybe mandatory medical checks.
Funeral Insurance vs Prepaid Funerals: Which One Is Better?
| Feature | Funeral Insurance | Prepaid Funeral Plan |
|---|---|---|
| Payment Type | Ongoing premiums | One-off or instalments |
| Cost Over Time | Can exceed benefit | Fixed cost, no extras |
| Immediate Coverage | Yes, accidental death | No, until full payment |
| Flexibility | Can cancel anytime | Locked-in service details |
| Refund if Cancelled Early | Often no refund | Partial refund or none |
If you’re looking for short-term peace of mind, funeral insurance can offer coverage from day one. However, for those planning ahead and able to afford upfront payments, prepaid plans often deliver better value over the long term.
How Much Does Funeral Insurance Cost in 2025?
Costs vary depending on age, smoking status, cover amount, and insurer. Here’s a snapshot:
| Age | Weekly Premium for $8,000 Cover | Non-Smoker | Smoker |
|---|---|---|---|
| 60 | $16 | ✅ | ❌ |
| 70 | $29 | ✅ | ❌ |
| 75 | $35+ | ✅ | ❌ |
Some insurers also offer stepped premiums (cheaper early on, increasing over time) and level premiums (stay the same but cost more initially).
Typical Age Restrictions for Australian Funeral Insurance
The age range for the following well-known insurers is as follows:
- Insurance for Apia Funeral: 45–80 years
- Coverage of Actual Funeral Expenses: 40–79 Years
- Insurance for Suncorp Funerals: 45–80 years
- Prepaid plans or funeral bonds are options if you’re not in this age bracket.
Leading Australian Providers of Funeral Insurance (2025)
The following are some of the most reputable lines of funeral insurance:
- Reputable policies designed for Australians over 50 are offered by Apia.
- Suncorp provides various cover options and expedited claims processing.
- Real insurance is all about price and ease of use.
- Low-friction plans and quick payouts are hallmarks of InsuranceLine.
Concluding Remarks
The product of funeral insurance is not universally applicable. Many people find it reassuring, especially older Australians who might not have sufficient money or be ineligible for life insurance. On the other hand, prepaid funerals or funeral bonds might offer superior long-term value for people who can budget or plan ahead.
In order to ensure peace of mind, carefully evaluate policies, look for capped premiums, comprehend waiting periods, and make sure you’re not overpaying. Regardless of the choice you select—prepaid, savings, or insurance—what matters most is that your loved ones are spared financial hardship.
