What are the most commonly selected cover amounts for funeral insurance NZ?

Posted on 20 June, 2018 at 04:21

Based solely on the cover amounts selected by our customers over the last 6 months we can say that around 40% choose $7500 and a similar (maybe smaller) amount choose $10000. Certainly these two cover amounts (or those in between) make up around 70% – 80% of all sum insureds selected.

$5000 is usually an option for the very budget conscious or where very simple funeral requirements are likely.

People who select funeral covers of $12500, $15000, $20000 usually do so as their requirements will be more significant than average, maybe very large families will be in attendance or include specific cultural requirements that may push up the price of the funeral or associated costs.

The really high funeral insurance cover amounts of, say, $25000 to $30000 tend to be taken when the customer also feels they may wish to clear debt (maybe a small loan or credit card) or leave a small amount for a family purpose (small inheritance for example).

It is important to know that with funeral insurance in NZ the claim is paid as a tax free cash amount to the nominated beneficiary. The proceeds can be used for any purpose ie not just to pay for actual direct funeral expenses. So, if you want extra to gift someone, clear debt, help with travel costs then that is all fine, up to you and the person who will receive the money.

The other consideration when selecting a cover amount for funeral insurance is affordability. The premiums must be affordable long term or it is just not worth the stress. So, sometimes the cover amount selected will be based solely on what you can afford. This is always a sensible way to decide even if it means you do not get quite the level of cover that is ideal. Sometimes some funeral insurance is better than none.

Paul Woollams, Funeral Insurance NZ