Discussing ones funeral plans is something that many people don’t really like discussing. Funeral insurance is big business, many of the companies promoting these funeral insurance products sell it as “ensuring their loved ones don’t have to suffer any financial burden”.

Funeral Rose

My grandmother

Unfortunately my grandmother recently passed away and today we had her funeral service. She was always well prepared and her funeral was no different. Prior to her passing she had organized the location where the funeral service was to take place, some words that she wanted spoken, the burial plot she wanted and finally a funeral insurance plan. She did this so that her final wishes were in order and also so that no one would be out of pocket when all things were said and done.

While driving home from the wake, I began to ponder the financial benefits/pitfalls associated with funeral insurance. It was never something I had really thought about before, but it was something which I know many people look into – particularly in their later years.


The advertised cost of  funeral insurance

No doubt by now you have seen any one of the hundreds or funeral insurance ads which are on our television screens every night. Many of the insurance companies state that it will only cost you a couple of dollars a week to join which will provide you piece of mind when it comes to your funeral (like you are going to care at that point). Many of the adverts state it can cost anywhere between $5,000 and $15,000. for a funeral.

There are two general types of funeral insurance cover:

Prepaid (Not often available)

Prepaid insurance plans work by paying an upfront amount to the funeral company. This price is fixed and there is nothing more to pay for the rest of your life, no matter how much the premiums on funeral cover increase by.

The actual cost of setting up prepaid funeral cover will vary depending on your age. Note: Many insurance companies no longer offer this option.


  • Nothing more to pay
  • Simple


  • If the funeral company goes broke you might lose all your money
  • Large up front amount to pay
  • The money used for the insurance is no longer able to be invested


Yearly Contribution (Most Common)

Yearly contributions to funeral cover is by far the most common type of funeral insurance option. The contribution for each member is primarily dependent on their  age:
















As you can see in the above table it can get expensive to have funeral cover in your latter years.


  • Small outlay each week/year when compared to the prepaid option
  • If the funeral company goes bankrupt you will only lose the last years worth of payments


  • Yearly costs can change at anytime
  • If you live into your 80’s the cost of insurance is very high


The real cost of funeral insurance

Assuming the following:

  • I have an average funeral costing $10,000
  • I pay a yearly contribution to a funeral plan and did not opt for prepaid
  • I start the payments at age 50
  • No Consumer Price Index (CPI) calculations

I would need to die before the age of 76 to make money on having funeral insurance.
Note to 50 year old Glen – I win financially if I die before 76, but then I’m dead – so I won’t exactly be enjoying my smart investment decision. What a conundrum.


Total Spent


















The potential savings

It turns out that one of the big savings to be made is if you happen to live longer than 90 and have pre-existing cover. For most insurers that I looked into, they have a policy stating that over 90’s don’t pay any more yearly fees for the rest of their lives.

The other big way to save money is to not get yearly contribution funeral cover – unless of course you are psychic, and you happen to know the exact details about your own untimely end. Provided you plan on living past 76 (less with CPI) then consider putting that money aside into a bank account which accumulates interest year on year.

I hate to think how much money my grandparents put into funeral cover, but I suspect it was a lot. I also suspect it was not a financially sound decision for them. For as long as I can remember they have always said they had funeral cover – my guess is about 15-20 years worth. Both my grandparents were in their mid 80’s when they passed away so you do the math…

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Thanks Glen