We hope that the following selection of funeral insurance questions and answers help you with your enquiries.
What is the main purpose of funeral insurance?
Funeral Insurance is designed to specifically provide a cash lump sum to pay the costs associated with your funeral eliminating the financial stresses that may otherwise result.
When is the funeral cover money paid out?
Most insurers aim to pay within 48 hours of receiving the necessary evidence of death. The intention is to provide the cash before it is needed to pay the funeral director.
Can I nominate the beneficiary to receive the funeral insurance claim money?
At the that same time you apply for the insurance you nominate a person (or trust etc) who the money is paid to. This means no waiting for your estate to be settled; usually we recommend your spouse or one of your adult children. Where no family exists a trusted friend is suggested. You can change the beneficiary at any time in the future at no cost.
How easy is it to buy a NZ funeral cover plan?
It is probably the easiest of all insurances to buy as there are no health questions asked and acceptance is guaranteed. Depending on your preferred insurer you can buy online, by phone or a very simple paper application form. 10 minutes is about all you need to arrange funeral insurance once you have decided to proceed.
What age must I be to buy funeral cover NZ?
Typically the youngest for funeral insurance is age 30 at the time of application and it goes right through to being available at commencement age of 85. Each insurer has their own age entry levels, eg some are 30, some 50 or 55 etc.
How much funeral cover can I buy?
Each insurer has their own cover level range but you can buy NZ funeral plans ranging from $5000 to $30000.
How much funeral cover do I need?
This varies depending on your requirements. But based on our own clients over the last 12 months or so we find the vast majority insure for $7500 or $10000 as they feel that amount will be sufficient to meet all funeral costs. Other people choose more cover as the cash payment can be used for any purpose ie to clear other debt or to help with some travel cost for family members from further afield. Often it comes down to affordability.
Is their much fine print when it comes to funeral insurance?
Funeral plans are designed to be simple so the wordings are generally far more basic than most insurance and there are only a few exclusions. Really the only fine print with funeral insurance is the initial two year stand-down for death by natural causes. This applies the same with every main insurer and it is there to ensure the guaranteed acceptance is not prejudiced by those who are terminally ill buying cover and potentially claiming almost immediately.
Can I pay for my funeral cover weekly, fortnightly, monthly or by direct debit, internet banking or credit card?
This varies from insurer to insurer. No insurer accepts weekly premium payments, some accept both fortnightly and monthly while some only allow you to pay monthly. All insurers prefer payment by direct debit and some only allow that option but some do also accept credit card or internet banking / automatic payment. Best way to find out is to ask us directly as there are many variables.
Do some funeral plan nz insurers have cut off ages for premiums to be paid with cover free thereafter?
Yes, some do but many insurers have payment until claim required. One option charges premiums to age 85 with cover continuing free after that, another has age 90 that this occurs. Ask us for more details about these options.
Is it possible I will pay more for my funeral insurance over time than I receive in a claim?
Yes, this is possible if you live a long life and well over the average life expectancy, but that is a good thing right! On the other hand if you pass away sooner rather than later you may find you have paid much less in premiums than your claim amount is.
Can I cancel my funeral cover in the future?
Yes, you can cancel your funeral insurance at any time at no cost. But there is no forms of premium refund or surrender value. If you cancel you simply stop paying the premiums and the cover you had ceases.
Can I increase or decrease my funeral insurance NZ sum insured at a later date?
Generally yes you can increase your funeral cover at any time in the future, unless you are already at the highest sum insured level. Your premium would increase to allow for the extra cover (and also determined by your current age). However, the most important factor to consider is that any stand-down period would apply again for the extra cover amount (not again for the original amount). So, we always recommend it is best to initially select the most ideal cover amount at the policy commencement to avoid this future complication.
Decreasing your cover is even easier, as long as you are not already at the lowest sum insured level you can easily request a cover amount reduction in writing to your funeral insurance provider. Your premium will reduce as a result.
Who are the leading funeral insurance providers in New Zealand?
Generally when thinking about Funeral Insurance NZ the first names that come to mind are the Cigna Funeral Insurance, the AA Funeral cover and then there are a selection of other such as Pinnacle Life, Fidelity Life, AIA, State, AMI and Greenwich Life who have funeral plans that might suit. Some of these insurers are niche type who specialise in insurance plans such as funeral covers NZ.
Cigna Funeral Cover, AA Life Funeral cover and Pinnacle Life funeral cover differ in what major ways?
The premiums for three of the major funeral
insurance providers, Cigna Funeral lnsurance, AA Funeral cover and Pinnacle
Life funeral plan are distinctly different. There can be a significant range
between top to bottom premiums depending on your age, smoker status and sex. It
is best to compare premiums before you buy as one insurer may be very
competitively priced in one age group but can be the complete opposite for
another age group.
Cigna Funeral Insurance currently has a 10% promotional discount for the first 12 months. After which the premiums revert to standard and remain fixed thereafter. Pinnacle Life funeral plan also has a 10% promotional discount but their discount instead applies for the first 24 months.
At Pinnacle Life their funeral plan has premiums that stop being paid at age 85, Cigna Funeral Cover has no such policy benefit. AA Funeral cover does have something similar but their age premium cut out off point is 90 (not 85 as at Pinnacle Life).
Are funeral insurance plans all different? how many funeral covers should I compare before buying?
important to know that not all funeral
insurance plans are the same. Yes, they all provide a cash sum on
your passing with the main purpose of helping to pay your funeral costs but the
reality is there are lots of subtle differences between funeral
insurance in New Zealand.
Do not limit yourself to comparing the premiums and policy benefits of just one of two insurers, nor just stick with the most common name brands like Cigna Funeral Insurance or the AA Funeral Plan. There are up to a dozen viable options with some being insurers that are not so well known. A number of niche type insurers specialise in Funeral Insurance NZ so it pays to have a good look around before purchasing.
A key to the success at the Insurance Helpline is that we are not a single insurer like a Cigna, AA, AMI etc. When you approach those insurers they tell you about their product and you do not really get a sense of how it might compare with any other funeral cover.
Whereas we will provide comparative product information from at least 10 different funeral plans and also provide premiums estimates from at least 5 insurers (assuming your meet age entry criteria for that many).
With us you can shop around but you can do it in once place. Feel free to complete the no obligation enquiry form on our website and we will provide a wide range of options for your consideration. Then if one option stands out for you we can assist to purchase the cover at no cost for our service.