Basic Differences between Life Insurance and Funeral Insurance
- Life insurance plans pay out a pre-decided lump sum payment when the policy holder passes away due to certain events such as an accident or natural causes. The amount paid towards life insurance plans is large and meant to help the family of the policy holder live their lives as easily as possible.
- Funeral insurance plans pay out a pre-determined lump sum payment when the policy holder passes away however. The compensation amount provided is usually limited and meant to cover funeral costs.
Why Funeral Insurance for Australians?
Funerals can cost a lot especially if the family of the policy holder wants to send away the deceased in a lavish way. On average basic funeral arrangements in Australia cost between $10,000 – $20,000.
Funeral insurance is a must for those individuals or families who do not want to burden their loved ones with funeral costs after they have passed away. While some life insurance policies give a small amount of the life insurance compensation payment as an advance towards funeral expenses, this is not the norm hence finding a life insurance policy within a budget that offers this benefit can be tough.
Benefits of Life Insurance Plans
Life insurance plans offer three or more benefits however; the most important benefits of these plans are that they are easy to purchase and they offer a guaranteed lump sum compensation payment provided the policy holder is eligible and has met the required conditions of the insurer.
Life insurance plans can be purchased online or via superannuation funds. While some insurers may require buyers with pre-existing conditions to undergo a few medical tests before purchasing a policy; usually this is not a requirement for buyers who are in good health. Buyers who opt for extensive covers may also be asked to undergo a few medical tests before their application is approved.
It should be noted that many insurers allow policy holders to choose 2 or more beneficiaries and also allow the policy holder to decide how much of the compensation amount goes to each beneficiary after the death of the policy holder.
Benefits of Funeral Insurance Plans
Funeral insurance plans are easy to purchase, can be purchased online, cost only a few dollars every month and buyers are not asked to undergo medical tests to purchase these plans. Buyers may be asked to fill out a questionnaire while they apply for the policy. The compensation payment is usually provided to the family of the deceased within 24-48 hours after the claim is filed. Funeral insurance plans can be purchased as additional plans with life insurance plans; or they can be purchased as standalone plans. Funeral insurance plans can be purchased in just a few minutes once the policy holder has done his research and is sure of which plan he wants to purchase. There are various cover limits available for funeral insurance plans and you can choose a cover limit depending on your budget.