Are you wondering how much you'll pay in funeral insurance premiums over the years? Find out all about the costs involved with funeral insurance here with Savvy.
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Planning for end-of-life expenses is a very responsible step to ease the financial burden on your loved ones. Paying for funeral insurance is one way that you can help reduce the stress on your family as they prepare to say a final farewell to you.
However, it’s well worth considering all your options when it comes to covering the cost of your funeral, and calculating which option or insurance policy offers the best value for money. In this Savvy guide, we explore the cost of funeral insurance and how to calculate whether the premiums you pay offer good value for money.
Funeral insurance may seem like a cheap option to help pay for the cost of a funeral. However, even though the premiums for funeral insurance can appear quite reasonable, for example, less than $25 a month, the cost can add up over a number of years. Here's how to calculate the real cost of funeral insurance over time so you can make a decision as to whether it offers good value:
Monthly premium cost x 12
Start by determining your monthly premium, which is the amount you pay each month for your funeral insurance. For this example, we’ll use the figure of $25 a month. Since there are 12 months in a year, simply multiply your monthly premium by 12. For example, if your monthly premium is $25, the annual cost would be $25 x 12 = $300.
Next, look at how this amount adds up over the years. First, decide how many years you intend to maintain the funeral insurance. Multiply the annual cost by the number of years you think you may hold the insurance. For example, if you are currently aged 70, and you think you may want to pay funeral insurance for a decade (that is until you are 80 years old), then multiply your annual premium by 10. The total cost of your insurance would be $25 x 12 x 10 = $3,000. If your funeral benefit amount was $10,000, and your premiums cost you $3,000 over a decade, then you may decide this is a cheap way to pay for your funeral over a period of time, and offers good value for money.
There are many factors that affect the cost of funeral insurance. These include:
Understanding these factors and considering your unique circumstances will help you decide if a funeral insurance policy meets your needs and budget.
The cost of an average funeral in Australia will vary significantly depending on various factors such as your location, the type of service you have planned, the number of people who are invited, and your specific preferences as to how the funeral is conducted.
On average, a basic funeral service in Australia will range from a minimum of around $4,000 for a basic cremation, right up to $15,000 or more for an elaborate funeral service including burial. The cost will be higher if two farewell services are required, such as a church service and then a committal service at a crematorium or cemetery.
Naturally, your religious and cultural background will dictate to a very large extent how a deceased person is farewelled, with funeral rites varying tremendously across the globe. These variations are well catered for in Australia, with funeral directors sensitive to the particular requirements of different religions.
For example, some families of Christian or Catholic faith may want an elaborate coffin, with options now available to have the coffin wrapped with colourful custom-printed images and photographs. Those who follow Islam may expect a simple white cloth shroud, and Jews may require a plain wooden casket. All of these religious and cultural requirements come with a different price tag.
There are many different variable elements which can contribute towards the cost of a funeral in Australia. These can vary significantly depending on individual choices and cultural and religious preferences. Here are some of the key factors that affect the cost of saying farewell:
Location:
Choice of burial or cremation:
Funeral director's services:
Casket, coffin or urn selection:
Services and ceremonies:
Memorialisation:
Legal and administrative expenses:
Being aware of all these factors can help families make an informed decision about the type of service they want and the costs involved in saying farewell to their loved one.
Luckily, most funeral directors will be able to give a detailed calculation of the cost of a funeral based on the family’s wishes. Here are some ballpark figures to give you an idea of how much individual components of a burial may cost:
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Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.
Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.
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© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
