Funeral Insurance is surprisingly simple to understand and to apply for. That is a large part of its appeal. Funeral Cover is straightforward and designed to be paid quickly because the insurer will not need to check previous heath declarations or review the circumstances of death.

Funeral Cover differs from virtually all other insurance types in that you are not asked to disclose any historical type information. So they are not accessing whether they can accept cover in the same way as they wold for life insurance, health insurance or car insurance.  Acceptance is guaranteed.

As long as you meet the age entry criteria and are a New Zealand citizen or resident currently living in NZ then cover is guaranteed to be accepted. The age entry points differ between funeral insurers; for example at Cigna Life you must be aged between 45 and 80 at the time of the cover being accepted. At AA Life the age range is 50 to 79 and at Pinnacle Life it is 30 to 75. But there are insurers who accept between 16 and 85 so the majority of potential buyers have options even if at some ages they are very limited.

Funeral Insurance is designed mainly just to pay for your funeral expenses although if you take a higher level of cover you can have some money over to pay off some debt or use to assist family members with travel expenses. Or some people just want to leave a few thousand over to help a loved one. Typical funeral covers range from $5000 to $30000 but again it varies from insurer to insurer.

Applications are extremely easy given the lack of pesky questions about any medical history. A number of insurers allow you to easily apply online with cover then issued immediately. If you prefer, the paper application forms are typically 1-2 pages plus a payment form.

 At the time you arrange cover you also nominate a trusted person to receive your claim funds. The cover amount is paid promptly as a tax free cash payment. Simple evidence of death is required by the insurer. You can alter the beneficary at any time if your circumstances alter.

Another reason funeral cover is popular is that the premiums are fixed at the time the policy is issued. So, you know, upfront, how much you will pay every year. So, this means no yearly increases to reflect your new age as you commonly expect with life and health type covers. Some insurers even have a cut off age where you premiums cease and the cover continues for free; 85 or 90 is the common age with some of the more well-known insurers. Then you can work out to the dollar the potential total life time cost of the insurance.

So, if you are a little concerned as to how your funeral costs may be paid then funeral insurance may be for you.

Paul Woollams, Funeral Insurance NZ