Funeral Insurance

Funeral insurance is designed to help cover the costs associated with your funeral and related expenses, such as a burial or cremation, ceremony, travel and other end-of-life arrangements. It pays a lump sum to your nominated beneficiaries when you pass away, allowing them to use the funds in any way they choose.

Cover typically ranges from $3,000 to $15,000, with most insurers accepting applicants from age 40 up to age 79 or 80. Some policies allow you to cash out part of your benefit or keep your cover with no further premiums once you reach a certain age, often 85.

However, it’s important to remember this is an insurance product not a savings plan, so if you decide to cancel your policy early, you won’t receive anything back. Before taking out a plan, it’s worth comparing your options carefully, weighing up the long-term costs and benefits, and considering whether alternatives like life insurance might suit you better.

How much is funeral insurance per month?

The cost of funeral insurance can vary widely depending on a number of factors, including:

• Age: premiums tend to rise with age because the risk of a claim increases over time. The older you are when you take out cover, the more you’re likely to pay.
• Cover amount: this refers to the payout your beneficiaries will receive when you pass away. The more cover you choose, the higher your premium will be.
• Premium type: most insurers offer the choice of stepped or level premiums.
  • Stepped premiums start lower but increase each year as you get older, making them more affordable upfront but more expensive over time.
  • Level premiums stay roughly the same over the life of the policy. They’re more expensive at the start but may cost less long term if you keep the policy for many years.
• Smoking status: smokers typically face higher premiums due to the increased health risks associated with smoking, which raises the likelihood of an earlier claim.
• Where you live: some insurers adjust premiums based on location, as funeral costs can vary from region to region. 

To give you a clearer idea of what you might pay, here are some examples showing how much premiums can vary due to applicant age and cover amount:

Age	Cover amount	Monthly premium range
45	$3,000	$12.29 – $15.48
	$15,000	$61.38 – $77.52
79	$3,000	$66.25 – $83.58
	$15,000	$331.73 – $418.83
Quotes sourced from Suncorp and Apia in July 2025. Quotes are based on a male non-smoker in Sydney.

As you can see, premiums can vary significantly depending on your age and the amount of cover you choose. Younger applicants typically pay much lower premiums, particularly for smaller cover amounts – but they may end up paying those premiums for a longer period. 

What am I covered for with funeral insurance?

Funeral insurance pays a lump sum to your loved ones when you pass away – but what you receive depends on how long you've had the policy. Most insurers have waiting periods, exclusions or limits, so it’s worth knowing exactly what you're covered for.

What’s covered in the first 12 months

Most funeral insurance policies have a 12-month waiting period during which coverage is limited to accidental death only. This means that if you pass away as a direct result of an accident during the first year, your beneficiaries can usually claim the full benefit – but won’t be able to claim for death under other circumstances.

You may also be covered for accidental serious injury on some policies, which provides a payout if you suffer a significant injury due to an accident.

Note: Insurers may define “accidental death” or “injury” differently and include specific exclusions (such as self-inflicted harm or high-risk activities), so it’s important to read the terms carefully.

What’s covered after the first year

Once the initial 12-month waiting period has passed, most policies will pay out the full insured amount in the event of:

• Death by any cause, including illness or natural causes.
• Terminal illness, if you’re diagnosed with less than 12 months to live. 

Optional extras

You may also have the option to tailor your policy by adding extra cover, such as accidental death benefit. This is an additional lump sum (usually between $1,000 and $50,000) paid if you die from an accident or resulting injury within a set period.

It’s important to check the full details of what’s included, excluded and optional under your policy before signing up to ensure you know exactly what is included.

Funeral costs in Australia: 2025

Funerals in Australia can cost anywhere between $4,000 and $15,000 on average, depending on the type of service chosen. According to Australian Seniors’ 2023 Cost of Death report, the average cost of a burial funeral is $11,039, while a cremation funeral averages $8,045.

Some of the most common expenses involved include:

• Coffin or casket – around $2,808
• Headstone – approximately $2,107
• Burial plot – around $1,733

There are also additional costs to consider, such as:

• Funeral director fees
• Transport of the deceased
• Use of a chapel or venue
• Urn (for cremation)
• Death certificate 
• Funeral notice
• Flowers, catering and other personal touches

Can I get life insurance to cover my funeral?

Yes – you can use life insurance to help cover funeral costs. While funeral insurance is specifically designed to pay for end-of-life expenses like a burial or cremation, life insurance offers a broader safety net. It pays out a larger lump sum that your family can use however they need, including for funeral expenses, mortgage repayments or daily living costs.

Here’s how the two types of cover compare:

	Funeral insurance	Life insurance
Coverage	Designed for funeral and end-of-life costs	Broader cover that can include funeral costs, mortgage and living expenses
Premium cost	Usually cheaper in the short term	Generally higher due to larger benefit
Payout size	Up to $15,000	From $100,000 to several million dollars
Application process	Often simpler with no health checks	May involve medical exams or detailed health questionnaires

The pros and cons of funeral insurance

Should I buy funeral insurance?

Funeral insurance can offer peace of mind, but it’s not the right fit for everyone. Whether it’s worth it comes down to your personal needs, how much cover you want and how long you expect to keep the policy.

One of the biggest drawbacks is that you could end up paying more in premiums than your family receives – especially if you take out cover at a younger age and keep it for many years. For that reason, it’s worth looking for policies with built-in protections, like a cap on total premiums or a guarantee that the benefit will at least match what you’ve paid in.

On the other hand, if you’re older or don’t qualify for life insurance due to health issues, funeral insurance can be a simpler option. It usually doesn’t require a medical check and can offer a quicker payout, which may help your family manage immediate expenses.

If you already have life insurance with a high enough benefit, you might not need a separate funeral policy. In some cases, it could be more cost-effective to increase your life cover slightly instead of holding two policies.

If you’re looking for alternatives, you could also consider using your superannuation’s death benefit or setting aside funds in a high-interest savings account to help cover funeral costs.