Types of Funeral and Life Insurance

Get a quote

Funeral insurance is the most basic type of life insurance that can be purchased in Australia. As the name suggests, most policies of this type are designed to cover the funeral and other death related expenses of the person who holds the policy. Like other policies offered by insurers, this investment is a way of protecting oneself and one’s family from uncertainty and financial risk. This means that in exchange for paying a monthly or annual fee, known as the premium, the policyholder is guaranteed payment in event of his or her death.

The main advantages of funeral insurance when compared to other policies include low cost premiums and ease of purchase. Unlike other types of policies, insurers generally do not require extensive medical exams when determining eligibility for funeral insurance. The main disadvantage is the limited amount of payment offered to the beneficiaries, which are the surviving members of the insured’s family.

Another type of policy offered in Australia is term life insurance. This is one of the most common policies chosen by those seeking life insurance. Like funeral insurance, this type of policy provides payment to the beneficiaries upon the death of the policyholder. Some policies may offer the option of payment in the event of the insured being diagnosed with a terminal illness. Another option that may be available is the choice for the beneficiaries to receive their compensation either as a lump sum or as a payment issued periodically, known as an annuity. The main advantage of term life insurance is their relatively low cost premiums. The main disadvantage to this type of policy is the fact that they are only valid for a fixed term. This means that if the policyholder does not die within this fixed amount of time, the policy will need to be renegotiated. The availability of the same terms, including the cost of the premium, is not guaranteed.

Two types of policies, whole life insurance and universal life coverage, are not available in Australia. Those seeking the kind of lifelong, extensive, guaranteed coverage provided by those types of polices may wish to examine life annuities instead. Life annuities are offered by some insurers in Australia, although they can be harder to find than the other types of policies. An annuity typically involves a monthly payment to the insurer, which is known as the accumulation phase of the annuity. When the policyholder decides to begin the payout phase, the insurer instead pays the policyholder a monthly amount. Many annuities are designed as retirement plans. However, in the event of the policyholder’s death, the surviving beneficiaries of the policyholder are eligible to receive the payments instead.

If you are interested in funeral plans or life insurance, be sure to visit Real Insurance.

Author: Jeremy P Stanfords
Article Source: EzineArticles.com
Canada duty tariff

Helpful insurance info

We compare insurance options from Australia's most trusted providers:

About MultiCover

MultiCover is a free service designed to provide you with easy access to a range of financial service specialists that cover the important things in life, Family, Work and Play. Simply choose and select from a range of options.

We aim to provide you with not only choice in financial services and products, but also options in how you can shop, compare and select these financial products and services. Many of our customers like to speak directly with a specialist about the product or service they are considering, gaining the benefit from their experience and customising a solution. Others prefer

learn more about us

Insurance Info

Visit our channel

MultiCover is a referral service and not a financial service provider. The information on our website and other documentation is of a general nature only and does not take into account your personal financial situation, needs or objectives. None of this information is, or shall be deemed to constitute financial and/or other advice to purchase a product or service. We strongly recommend that you obtain professional advice prior to purchasing any financial product and/or service. Please see our site Terms of Use and Privacy Statement for more information.

We need some information about you to get started:


*Submitting your details and agreeing to our terms of use enables us to connect you to a Synchron insurance specialist who will provide the quote by email or phone.

VIDEO TITLE

Get an insurance quote