01 Aug 2017
None of us like to ponder on our own mortality, no matter how inevitable we know it is. Preparing yourself is one thing, but making sure your family goes through the grieving process properly is something entirely different, and perhaps, even more important to you.
When it comes to planning ahead to ease the burden of your death on your loved ones, you know that preparation begins with having the right funeral cover. To truly provide peace of mind for your family and friends, you need to think about funeral cover options. But don’t go signing away before you fully understand the terminology of the funeral cover documents, so you can get the best outcome.
First, a definition
Before you consider purchasing funeral cover, it’s a good thing to know exactly what it is and how it will help your loved ones once you’ve passed. Funeral insurance is a set sum of money that is paid out to your family in the event of your passing. The amount of money you leave behind to tie up loose ends and to ensure you get the celebration you deserve is up to you.
Funeral insurance is easier to set up than life insurance - simply give Cigna a call to discuss the sum you want and then you pay - at a frequency you chose. What’s a premium?! Don’t worry; we’ll get to the terminology shortly! Unfortunately funeral insurance isn’t at the top of most people’s list when they’re preparing for the future. We’d rather spend our time organising more important things, right? But what’s more important than making sure your family is prepared for your eventual death? If you take the time to consider the impact of your death on your loved ones, you’d be signing on the dotted line stat. Also, consider leaving this world the way you lived it. Go out with the party that you want - a celebration of the beautiful life you lived. You don’t want to put your family into debt trying to fulfil your last wishes, do you? Then do the right thing and get funeral cover.
What does a funeral cost?
Depending on your own personal style, the cost of your funeral is variable. When you’re planning for the amount you’d like to be insured for, there are plenty of things that you need to take into consideration. Funerals, when we go to them, seem seamless. Everything is perfect from the flowers to the catering. But all of it takes money and planning. Here are just a few of the costs that can really add up to a hefty funeral bill:
It looks like a small list, and depending on how many people will attend, the cost can go up or down. You deserve better, and so does your family.
Who should consider a funeral policy?
Funeral insurance depends on your individual financial situation - your nest eggs, saving, and budgeting will all determine whether or not you really need funeral insurance. Funeral Cover is particularly helpful for people with the following situations:
You have no life insurance coverage
You have no other means of paying for a funeral
You want to cover your expenses yourself
You have limited savings and no way to pay the bills
If you identify with any of these above statements it’s time to talk to your insurance provider about getting funeral insurance. Over the years funeral insurance has become a popular product for insurance companies all over the world. There are thousands of applications for funeral insurance all over New Zealand each year. Why? Because Kiwis want to be prepared in the event of a premature or untimely death. You can’t put a price tag on the peace of mind you’ll get that comes with being prepared with funeral cover.
ABC's of funeral cover
Once you’ve decided to make the smart choice of purchasing funeral cover you then have to brace yourself for the worst part: the insurance jargon. It’s true! If you’re an insurance novice, you might not know what you’re signing up for! Have no fear - we’ve got the information you’re looking for.
By the time you’re finished with our top terms, you’ll be a funeral cover expert! Read on!
1) Policy owner
Let’s start with the easiest term! The policy owner is the person who is purchasing the policy. That’s you, silly! You bought the policy which means you control it. That said, the policy owner may not be the person whose funeral you’re covering. From a legal standpoint, the policy owner is the only one who can change the beneficiary and get any necessary policy details from the insurance company.
The beneficiary is the person who will receive the funeral insurance payout. Your nominated beneficiary is named in your schedule and can be changed by you at any time. Your beneficiary must be an individual person who is aged 16 or older. There aren’t too many restrictions on who your beneficiary can be, but they can’t be your trust, trustee, or a company. If your beneficiary passes away or is difficult to find, the money will be paid to your estate.
Surely, you’ve heard of premiums, the amount of money that you pay your insurance company to be insured. The amount you pay is decided by you when it comes to funeral insurance, it all depends on how much you’d like in order to see your last wishes carried out. Insurance companies like Cigna offer a range of options to suit everyone’s financial situations. Clever Kiwis pay their premiums by direct deposit so that they never miss a payment in order to keep the policy current.
4) Funeral benefit
This is where we show you the money, so to speak! The funeral benefit is the amount of money you’ve insured that is paid to your beneficiary. Again, the amount is entirely up to you. If you’re looking at cremation as opposed to a fancy mausoleum, you can have a funeral benefit of between 5K and 30k.
Like we’ve said before, we know that it’s not easy getting through the insurance paperwork as there’s a lot of jargon that is easy to misinterpret. As the master of your own destiny, you’ve got to know what every term means on your funeral insurance policy, because you can’t sign a legal document that you’re unsure about!
While we’ve covered a few of the terms here, contracts can differ from company to company. The best thing for you to do when you’re shopping around for funeral insurance is to get in touch and start asking questions. If you’re already insured with Cigna, through life insurance or travel insurance, we can talk you through the ins and outs of funeral cover. All you’ve got to do is pick up the phone and ring us! We’ve got our people on stand-by for you! Don’t leave it too late, call us today!
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