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Funeral insurance
Funeral insurance
Written by
Madeline Pettet
Edited by
Ellie Garran
Reviewed by
Adrian BennettEasily compare life insurance quotes
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What is funeral insurance?
Long story short
Funeral insurance could help cover funeral costs
The policy payout to your beneficiaries could help cover costs like your coffin and burial or cremation.
Funeral costs can typically range from about $8,000–$20,000
Accordingly, funeral insurance benefits usually range from $5,000 to $15,000
Funeral insurance is one way to pay for your funeral
Other options include funeral bonds, prepaying a funeral director, or life insurance with an advance funeral benefit.
What is funeral insurance?
Funeral insurance is a kind of life insurance policy where you pay a regular premium and then, when you pass away, your nominated beneficiaries receive a lump-sum payment or benefit that can be put towards the costs of your funeral.
Typically, you’ll see funeral insurance benefit options ranging from around $5,000 to $15,000. This could help give you peace of mind that your family will have a little less financial stress to deal with during an already difficult time.
What is the benefit of planning for my funeral?
Planning for your funeral and outlining your wishes can help you understand how much your funeral will cost, as well as help those close to you understand how you’d like your life to be celebrated. Making your funeral plans clear can also give you peace of mind that no one will be put in the uncomfortable position of guessing what you may have wanted. Overall, it can be both a pragmatic and reassuring process.
From there, you can make things easier for your loved ones by covering your funeral costs, like cremation or burial, in a number of ways, including through funeral insurance cover.
What are the pros and cons of funeral insurance?
Some of the pros of funeral insurance products include having an alternative to saving for your funeral expenses and possibly having immediate cover. Conversely, cons of funeral insurance can include premiums that increase over time and possible restrictions. However, depending on your circumstances, you may view some pros or cons as more important than others.
Pros
- It may offer immediate cover: You may not need to hold the policy for a set length of time before you’re eligible for benefits. Exclusions may apply, however.
- It could be an alternative to saving for funeral costs: If you’re someone who struggles with the self-discipline not to dip into your savings, then having your funeral insurance premiums automatically deducted might be a more convenient option.
- The benefit may help cover the cost of your funeral: Funeral costs can typically range from $8,000 to $20,000 with some funerals being more elaborate than others.1Moneysmart – Paying for your funeral Meanwhile, funeral insurance cover amounts tend to be between $5,000 to $15,000, depending on your chosen level of cover.
- You can shop around and compare: There’s more than one funeral insurance option out there, so you can look for a funeral insurance policy that offers more of what you’re after. You may like to gather a few funeral insurance quotes and review any policy documents before making a decision.
- It’s commonly offered with guaranteed acceptance: Unlike some types of life insurance, funeral insurance may be offered without any or limited consideration of your medical history, occupation, health status or other factors.
Cons
- You may pay more in premiums than you receive in benefits: Depending on your premium and when you take out funeral insurance, you may end up spending more on premiums during your lifetime than what the policy pays out upon your death.
- Your premiums will go up over time: Age and market factors mean that your premiums will increase. You may want to consider this when thinking about your budget.
- Immediate cover may only apply to certain causes of death: Generally, you’re only immediately covered for accidental death.
- Your family may not receive the money immediately: The insurer will need to process your claim, which can delay when your loved ones receive the lump sum. However, as of December 2025, 93% of funeral insurance claims were processed within a fortnight, if not sooner, according to the Australian Prudential Regulation Authority.2Australian Prudential Regulation Authority – Life insurance claims and disputes data
- There may be age, health and other restrictions: These restrictions may limit your eligibility for cover or affect the cost of your premium.
Helpful tip
Did you know there are two types of funeral insurance? Funeral life insurance and funeral expenses insurance.
Funeral life insurance lets you choose the benefit amount, like $10,000, to be paid to whoever you choose when you pass. They can then use those funds to pay for funeral costs as needed.
Funeral expenses insurance, on the other hand, pays funeral expenses up to a chosen limit. This can mean your family needs to provide receipts to the insurer to receive the money, the way you would to claim on your health insurance. If your funeral costs less than the policy limit, your family doesn’t receive the leftover money.
Adrian Bennett
General Manager for General Insurance
How much does funeral insurance cost?
Like other types of insurance, different factors can affect your funeral insurance premium such as your age and gender. Additionally, the amount of cover you choose – like a higher benefit amount – can change your premium. These factors can each affect your funeral insurance premium and may change over time in different ways.
Are there alternatives for funeral cover?
Yes, there are other options to pay for your funeral, including prepaid funeral plans and savings accounts. The option you prefer can depend on your situation, including your savings abilities and intended funeral service.
Alternatives to funeral insurance include:
- Prepaid funeral plans: You may be able to pay for your funeral in advance, either paying the funeral director in one up-front payment or making a deposit followed by regular payments. Each state has their own consumer protections in case the funeral director goes out of business before you pass, but some may be more limited than others.
- Funeral bond: This is an investment option where you pay a deposit followed by regular payments. Your money grows with interest over time but can only be accessed when you pass, and can only be used to pay for your funeral service costs.
- High-interest savings account: Like a funeral bond, you can set up a bank account to regularly deposit funds into. This can offer flexibility if you need to use the money for something else, like outstanding debts, but it may require some self-discipline to keep it growing.
- Life cover: If you have life cover, also known as term life insurance or death cover, your family could use some of the benefit payout for your funeral. They may need to wait a little while for the claim to be processed, though. Alternatively, your policy may allow for an early payout of a small portion to help with funeral expenses.
- Superannuation: Your family may be able to access what remains of your superannuation, although they may have to pay for the funeral expenses up-front and then claim back once your will is final. In addition, you may be able to access your superannuation yourself early depending on your circumstances, such as if you’re diagnosed with a terminal illness. Your superannuation may also include life cover.
How do I choose funeral insurance?
To choose funeral insurance, it may be helpful to think about your budget (now and in the future), what your preferred style of funeral may cost and your current health, including any pre-existing conditions, and then aligning this with the policy’s cover amount, premiums and features.
You can shop around for funeral insurance and compare policies by considering things like:
- features, including benefit options and whether any additional perks or support are included for your family
- premiums, including if and how they may change over time
- exclusions, like what causes of death or pre-existing health conditions are covered.
To get the full story, it’s useful to review the relevant Product Disclosure Statement, or you could reach out to the insurer for more information.
Frequently asked questions
Can I get funeral insurance if I have a pre-existing medical condition?
Funeral insurance policies typically exclude death resulting from pre-existing medical conditions where such death occurs within the first 12 months of the policy. Specific terms and exclusion periods vary by product.
For example, cover for accidental death is generally from the policy start date; however, death resulting from a pre-existing medical condition during this initial 12-month period will not be eligible for a payout. However, after this period cover is typically for death from any cause but be sure to review the relevant Product Disclosure Statement to check what you are and aren’t covered for.
Are there any waiting periods for funeral insurance?
Yes, funeral insurance often has waiting periods, although most policies will cover accidental death without a waiting period. The specific waiting periods you need to serve may differ between policies. For instance, your policy may not cover certain causes of death until you’ve held it for a set time. The Product Disclosure Statement should outline any waiting periods that apply.
When should I get funeral insurance?
Some people find funeral insurance particularly relevant when they start thinking more seriously about end-of-life planning, whether due to age or health considerations. It’s worth considering the likely cost of premiums over time alongside the benefit amount before making any decisions.
Before making any big decisions, though, you might want to consider the likely premiums and how much you could pay over time, especially if you live much longer than you expect. Remember, Australian men who were aged 65 in 2021–2023 have a life expectancy of 85.1 years, while Australian women of the same age have a life expectancy of 87.7 years, according to the Australian Institute of Health and Welfare.1Australia Institute of Health and Welfare – Deaths in Australia
Where can I find and compare life insurance?
iSelect and our partner Lifebroker don’t compare funeral insurance plans; however, funeral insurance isn’t the only option on the table to help cover the costs of your funeral. Life insurance, for instance, could help pay for your funeral, along with giving your loved ones some breathing room as they make the difficult transition to life after you’re gone. We can help you easily compare a range of life insurance options online with our comparison tool, so you can get back to spending time with the people who matter.
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iSelect’s partnered with Lifebroker (AFS Licence number: 400209) to help you compare a range of Life Insurance policies. iSelect earns a commission from Lifebroker for each customer referred through the website or contact centre. Lifebroker do not compare all life insurers or policies in the market.
iSelect Life Pty Ltd – ABN 89 124 304 347, AFS Licence Number 331128. Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice iSelect gives you, having regard to your personal situation, before acting on iSelect’s advice or purchasing any policies. You should consider iSelect’s Financial Services Guide which provides information about iSelect services and your rights as a client of iSelect.’