Funeral Insurance NZ Helpline

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Funeral Insurance - some examples of how a higher level of cover could be useful at claim time 

People often think about funeral insurance only being useful to help pay the actual costs of a funeral. 

But they do not always appreciate that there are other benefits as well that your funeral insurance claim payout can assist you with.  

How can I use my funeral insurance payout?

Well, of course, first and foremost the money is designed to be used to pay for your funeral. That includes the cost of burial or cremation and any associated service. The claim is paid out as a cash amount to your nominated beneficiary. That is quite easy to understand but it does not have to stop there. 

You can select from a range of funeral covers, some allow you to insure up to $30000. As the money is paid to your beneficiary it can be used for absolutely any purpose. You do not have to advise the insurance company. As soon as the claim is approved the money is paid out and that is the end of the involvement of the insurer. 

It is sensible for the insured person and the nominated beneficiary to agree in advance what the intention of the claim money is for, particularly where your cover amount selected is for more than just the likely cost of the funeral. 

What else do people typically use the claim money for (by taking a higher level of cover?

To clear debt. Sometimes people suspect that they may still have some minor debt at the time of their passing that could be cleared at the same time. This could be a small mortgage, loan, hire purchase or credit card. A higher cover amount can be taken for this purpose. 

It is quite common for our customers to use some of their funeral insurance money to pay travel cost for those who would be expected to attend but who may live some distance away, either elsewhere in New Zealand or maybe overseas. The cost to fly, at short notice, from Australia, the islands or beyond can be quite high. This is especially so if there is a whole family involved. 

We have had instances where people have told us their children reside in the Pacific Islands and obviously would return to NZ for a funeral. Or maybe it is their parents who would need to travel. But, the reality of that could be that the costs are significant and we can assume, in some cases, almost impossible to pay without other family help. So, it is quite common, in those examples that the family buys a higher level of funeral insurance so that money can be made available almost immediately to pay travel costs. 

In some instances we are told that the person buying the funeral cover wants to also leave behind a small amount for someone in the family or a close friend. With standard life insurance, that typically has a higher cover level, this is more straightforward but can also occur with funeral insurance albeit the amounts would need to be modest given the maximum cover amounts typically range from $25000 to $30000. 

So, if you feel you might want to allow for such things then consider a higher sum insured. Of course, it costs more than insuring for.say $7500, but if the outcome is what you require then the cost just becomes something else to factor in when buying funeral insurance. 

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