You should know exactly what you are and aren’t covered for when you sign up for funeral insurance to prevent any unwelcome surprises. Here’s what you’re likely to be covered for under your funeral insurance clause:
Natural causes or related illness/condition
Old age and illnesses stemming from it are naturally the most common causes of death in Australia, so these are obviously covered by your funeral insurance policy. An important thing to note is that despite this, most funeral insurance policies won’t cover you for any age-related death in the first 12 months of a life insurance policy, meaning your family could be left in the lurch if you pass away soon after taking it out. One way to mitigate this risk is to buy your policy at an earlier age, such as over 60, rather than waiting until you are in your 70s or 80s.
Death caused by terminal illness is slightly more complicated when it comes to seniors’ funeral insurance. Different funeral insurance companies in Australia may have different definitions about what constitutes a terminal illness, often defining it as being given 12 months or less to live. If you’re diagnosed with a terminal illness within the first 12 months of buying your policy, you may not be covered. Rather, your insurer may offer you a refund on the premiums paid up to that point.
Unlike the previous two causes of death, accidental death coverage may not automatically be included in every funeral insurance policy. Rather, it may be an optional extra with some providers, meaning you’ll have to pay more for your premiums to ensure that you’re covered. Accidental death is typically the only insured event that you’ll be covered for within the first 12 months of buying your seniors’ funeral insurance policy. In some cases, this payout will be increased by up to two or three times depending on your insurer. Be careful about the exclusions your insurer places on accidental death cover, as they may not pay out your sum if accidental death is caused by self-harm, for example.
Accidental life-changing injury
You may not think this would be covered by funeral insurance, but serious and life-changing injuries can fall under your policy. Different injuries will receive different payouts, with loss of vital senses or limbs and significant head trauma affording a higher payout than less serious injuries. Once again, it’s crucial to be aware of the inclusions and exclusions before signing up for any funeral or life insurance policy.