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Funeral insurance Frequently Asked Questions (FAQs)

Frequently Asked Questions (Frequently Asked Questions)

How does funeral insurance work?

Funerals can cost thousands of dollars and some people find they just aren’t financially prepared to pay for such an unexpected expense. Funeral insurance can help cover the cost of your funeral by paying a lump-sum of your chosen benefit amount to your loved ones when you die. While it’s called ‘funeral insurance’, your family can choose to spend the payout as they see fit, so it could also be used to cover the cost of settling your affairs or other final end-of-life expenses. You can choose a single or joint policy so you can also cover your partner at the time of your application.

How much funeral insurance is enough?

The amount of cover you choose will depend on your personal circumstances and what type of funeral you want. Do you want a simple no-frills funeral, something more elaborate to commemorate the end of your fabulous life, or a run-of-the-mill funeral that’s neither simple nor fancy? It’s important to decide on this first as the differences in cost of each type of funeral can be in the thousands. You may also want to consider any other final expenses that your family may need to meet after you’re gone.

Who can apply for funeral insurance?

For funeral insurance policies directly available through Choosi, you must be an Australian resident aged between 18 and 79 years to apply.

Do I need a medical check-up or blood test to take out funeral insurance?

Some insurance policies may need you to have a medical check-up and blood tests, but this isn’t required for policies available directly through Choosi. As long as you’re an Australian resident aged between 18 and 79 years old, you’re guaranteed acceptance.

Can I take out cover for my partner?

Yes, you can take out a policy on behalf of your partner, but you won’t be able to nominate yourself to receive the benefit. You can also include your partner on your policy if joint cover is available as an option.

Can my partner take out cover for me?

Yes, your partner can take out a policy on your behalf, but they won’t be able to nominate themselves to receive the benefit. Your partner can also include you on their policy if joint cover is available as an option.

Can I take out cover for my parent/s?

Yes, you can take out a policy on behalf of your parent, but you won’t be able to nominate yourself to receive the benefit.

Why should I consider funeral insurance?

No one can be really prepared for a loved one dying. On top of the emotional stress and grieving after a loss, your family would also need to worry about the cost of paying for your funeral. Funerals can cost thousands of dollars and not everyone may have this kind of money squirrelled away to pay for a funeral. Having funeral insurance helps ensure that final expenses related to you passing away can be taken care of, and your family is freed from this financial burden at a difficult time. These expenses could include paying for your funeral, paying off any unpaid debts like credit cards, or settling your affairs.

For policies available through Choosi, it’s worth noting that cover is for accidental death and accidental serious injury only in the first 12 months, then death by any cause after the 12-month waiting period. Make sure you check the Product Disclosure Statement of the funeral policy you’re interested in, as these details may differ slightly.

When does my funeral insurance policy start?

Your funeral insurance policy will start as soon as your application has been accepted by the insurer that you choose to take out your policy with. For policies directly available through Choosi, cover is only for accidental death and accidental serious injury for the first 12 months, and cover for death by any cause applies after this 12-month waiting period.

When does my funeral insurance policy end?

For policies directly available through Choosi, your cover ends on:

  • the date of your death;
  • the date you or your insurer cancel your policy;
  • when you reach age 100; or
  • (if applicable) the date you choose to take up your policy’s early cash payout option.

whichever happens first.

Is my funeral insurance policy valid if I’m travelling overseas?

You’ll need to check the Product Disclosure Statement for the policy that you’re looking to buy to make sure but generally, most policies will cover you while travelling overseas.

Can I choose who receives my funeral insurance payout?

Yes, you can nominate up to five beneficiaries to receive your payout, by completing a beneficiary nomination form that your insurer will give you (sometimes this will be included in your Product Disclosure Statement). There are some conditions that apply which you must comply with and these details will be included on the form.

What factors affect the premium for my funeral insurance?

For policies available directly through Choosi, your premium is calculated based on your age at the time you apply and the cover amount you choose. The policies we offer have level premiums which means they won’t increase each year unless you apply to change your cover, or your insurer changes the premium rates for your policy. And once you reach age 85, your cover continues at no additional cost to you.

What if I cancel my funeral insurance policy—do I get any money back?

You’re entitled to a cooling off period (usually 30 days), and as long as you cancel within this time, you’ll get a full refund of the premium that you paid unless a claim has been made. It’s worth remembering that funeral insurance isn’t a savings or investment plan, so if your policy gets cancelled after the 30-day cooling off period, your cover ends, and you won’t receive a premium refund.

Can I get funeral insurance for my family as well?

This depends on the insurer but there are single plans and joint plans. For policies available through Choosi, a joint plan can cover yourself and your partner, as long as you both meet the age and resident eligibility criteria.

What does funeral insurance cover?

For policies available through Choosi, you're only covered for accidental death and accidental serious injury in the first 12 months. After the first year of holding your policy, cover is for death by any cause and diagnosis of a terminal illness with 12 months or less to live. Ensure you read the relevant Product Disclosure Statement for further details.

What isn’t covered by funeral insurance? What exclusions apply?

For policies available through Choosi:

  • funeral insurance only covers you for accidental death and accidental serious injury for the first 12 months of your policy. After the first year of holding your policy, cover is for death by any cause and diagnosis of a terminal illness with 12 months or less to live.
  • the terminal illness benefit (with a diagnosis of 12 months or less to live) is only payable after you’ve held the policy for 12 months; and
  • you’re not entitled to a payout for accidental serious injuries if they were due to:
    • intentional self-inflicted acts, suicide, or attempted suicide;
    • engaging in any criminal or illegal activities;
    • using recreational drugs or alcohol;
    • playing professional sports including motor sports;
    • wars/riots; or
    • being an airline pilot or crew member.

Other exclusions to funeral cover also apply.

Ensure you read the relevant Product Disclosure Statement for further details.

Is there any tax payable on the payout for funeral insurance?

No, the payout is generally a tax-free payment but as everyone’s circumstances are different, you should still get professional tax advice just to be sure.

Can I increase or decrease my level of funeral insurance cover?

For policies through Choosi, you can apply to decrease the level of funeral insurance cover. If you want to increase it, you’ll need to apply for a new policy for the increased amount or cancel the existing one and take out a new policy for the original benefit amount plus the increase as long as it’s within the range of cover offered by the insurer and you meet the eligibility criteria. Note that any increase to your cover amount will result in an increase to your premiums.

How do I make a claim?

You, your beneficiary, or your legal representative will need to call or write to your insurer (the contact details will be included in the Product Disclosure Statement of your policy). You’ll be sent a claim form to complete and return back to them, along with proof the insured event took place. Your insurer may also ask your doctor (if applicable) to fill out a form. If you want to make a claim on your policy, you should do so as soon as possible, ideally within 120 days of the insured event taking place as this will assist in reducing any delays within the claim assessment.

How will my family get the funeral insurance payout?

If you nominated a beneficiary for your payout, then it will be deposited straight into their preferred bank account. If you don’t have a beneficiary, a cheque will be forwarded to your estate.

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