Basic Benefits of Funeral Insurance
The basic benefit offered by this type of insurance plan is the lump sum compensation payment provided by the insurer to the family of the policy holder. This compensation payout is given when the policy holder passes away due to reasons such as heart attacks, illnesses, accidents or natural causes.
If the policy holder attempts to suicide, then his family will be exempted from getting the payout and any other benefits offered by the insurer. It should be noted that the compensation payment will be given to the beneficiaries of the estate or of the policy and the policy holder is required to immediately update this list if there are any changes in the list of beneficiaries.
Advanced Benefits of Funeral Insurance
- A free “will kit” will be offered by certain insurers to the person purchasing the policy. This will kill can help the policy holder draft and create his will while avoiding legal charges. There are terms and conditions to using these kits, and the policy holder will have to consult with a legal representative to use such kits.
- The 24 hours worldwide cover is applicable on some funeral expenses plans. This worldwide cover ensures that the policy holder is protected even when he is on vacation or while he is travelling on work purposes. This worldwide cover may not protect the policy holder is he has migrated to a different country. In the case of permanent migration, the policy holder will have to purchase a funeral insurance plan from an insurer in the country he plans to migrate to.
- The accidental death benefit can offer up to 2 times the regular compensation payment. This means that, if the policy holder has purchased a policy with a cover limit of $15,000 then if he opts for the accidental death benefit then his family can get up to $30,000 as the lump sum compensation payout provided the policy holder passes away due to an accidental death.
- While the policy holder is alive, he can enjoy peace of mind knowing that if in case he dies while the cover is active, then his family will get the lump sum compensation payout from the insurer. Buyers who are interested in making most of funeral insurance plans should consider getting long term plans that offer a term of 10 years or more.
5 Things You Should Know About Benefits of Funeral Insurance
- The benefits offered by the insurer can be made use of by the beneficiaries of the policy holder’s estate when the beneficiaries file a claim. The claim has to be filed within a certain number of days after the death of the policy holder. The monetary benefits offered by the insurer will be provided within 24 – 48 hours of the claim being filed. The compensation benefits will be provided to those families who meet the claim eligibility criteria and those families who have paid the premiums in full till date. To get the monetary compensation payment for the policy, the beneficiaries have to file the claim in full and support the claim with a death certificate along with all other necessary documents.
- The benefits offered by insurers in Australia are subject to terms and conditions. Due to this reason, buyers are advised to read the policy’s terms and conditions or the product disclosure statement carefully before agreeing to purchase a contract.
- Some insurers may allow buyers to back out during the waiting period for no additional charge; while other insurers may charge a small policy cancellation fee. If you have any doubts regarding the benefits or the terms of the policy then make sure that you contact the insurer, insurance agent or a private tax expert before purchasing the plan. Insurance experts, tax experts and financial advisors that offer personalized advice will charge a fee before they impart advice.
- Policy holders must make it a point not only to review their funeral insurance plan once a year but also to explain the benefits of their plan to their families after reviewing the plan. Doing these 2 things will ensure that the policy holder has a cover that is applicable to his latest needs and that his family knows about these benefits and how to claim these benefits if in case anything happens to the policy holder while the policy is active.
- These plans are affordable and can cost as less as $8 a month; however if you opt for a flexible plan and you decide to change or add benefits to your plan then you may have to pay higher premiums. Paying premiums every year in advance either online or via the phone to the insurer can ensure lower premiums. Making use of non smoker’s discounts, healthy living discounts or any other offers can also help you keep your premiums affordable.
Limitations of Funeral Insurance Plans
- The compensation payment is not given to the policy holder’s beneficiaries in a few scenarios. These scenarios include, the policy holder suiciding to get the compensation payment for his family, the policy holder hiding information due to any reason, the policy holder not declaring relevant information on time and the claim not being filed on time. If the claim is filed incorrectly then the claim may be rejected. Before filing a claim for funeral expenses insurance plans, the claimant should ensure that the claim meets the eligibility criteria.
- Since premiums for these plans are usually affordable, most buyers can purchase standard covers unless they want a better cover that offers maximum financial protection for their families. Buyers who opt for standard covers will have to wait for 15, 30, 60, 90, 120 days for the policy to come into effect. This waiting period helps keeps the premiums affordable and can be extended if required. A longer waiting period usually implies that the buyer will be asked to pay lower premiums. A longer waiting period will prevent the claimants from filing a claim if the policy holder passes away while this mandatory period is active.