Funeral costs don’t have to be a burden

Funeral costs don’t have to be a burden

WELLINGTON – 12 January 2015

Recent media coverage has brought to light a rise in the number of families unable to cover the cost of burying a loved one, with the cost of an average funeral between $7-10,000.

“Being in the life and funeral insurance business, we are regularly in contact with people who are trying to plan a funeral while dealing with the emotional situation of a loved one passing away,” says Lance Walker, CEO of Cigna Life Insurance. “This can be a really difficult time for people, and with the relatively high costs of funerals, some Kiwis just aren’t prepared.”

“But with a bit of prior planning it doesn’t have to be that way,” adds Lance. “Based on our experience in the funeral insurance business, I’d like to share three options to prepare for a funeral that will have minimal impact on your daily life - it’s about a bit of planning now to reduce the stress and worry at what can be a difficult and emotional time for loved ones.”

Set up a savings account

Setting up a term deposit or savings account specifically for funeral costs is easy to do and enables you to save until you have covered the cost of a funeral. The benefits of compound interest mean you will continue to earn money on this account until it needs to be used. It also pays to think about who will have access to the account when it is needed, and how quickly it can be accessed.

Pre-pay funeral expenses

A pre-paid funeral gives you more control over funeral arrangements. There are a variety of ways to do this from simply pre-paying for individual items like a burial plot, through to a complete funeral from a funeral provider.

Life or funeral insurance

If you have a life insurance policy, there’s a good chance that it includes a funeral cover feature. You can check with your insurance provider or read your policy wording to find out more about this feature. It’s worth giving these details to the person you’ve nominated to access the payout, so that they have all the details close to hand when they need them.

Another option is funeral insurance which involves paying regular premiums for a fixed amount that is paid out to a nominated person when you pass away. Premiums are based on how much money you think you require for a funeral, and factors such as age and health. Cigna Funeral Cover has up to $15,000 of cover available, is paid out within 48 hours of the claim being accepted and doesn’t require medical checks. It’s also worth noting that funeral insurance can be purchased for other people, for example you may want to plan ahead by purchasing cover for your parents or grandparents.

“Nowadays there are a number of other options available for planning and paying for funerals” says Lance. “Whether you want to go for a cheaper option or a top of the range funeral, it’s always worth doing a bit of planning in advance to help reduce pressure and stress in the future.”

For more information on Cigna Funeral Cover, visit www.cigna.co.nz/insurance-products/funeral-insurance

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