Funeral Insurance: Consumers ripped off and owed compensation
What is funeral insurance?
Funeral insurance is a type of insurance to help cover the funeral costs after you or a family member passes. This type of insurance coverage ranges from $5,000 to $20K and the proceeds go towards paying out your nominated beneficiary or family members you have chosen. Planning ahead for how you’re going to pay for your funeral is important. But remember that not all insurance policies are created equal – some policies may only cover burials while others may result in you paying greater amounts in premium costs than the actual coverage paid out.Â
It’s important that you ask questions about the best type of insurance coverage to suit what’s best for your family for the long term before signing on any dotted lines.Â
In the last 5 years in Australia, ‘Funeral insurance’ has been in the spotlight of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, with concerns about funeral insurance being marketed to vulnerable Australians.Â
Higher premiums than ever would be paid back.
Thousands of Australians have paid for funeral insurance policies and are being charged high premiums causing financial strain on families. Especially for pensioners.Â
As you get older, your funeral insurance premiums may increase, and you’ll potentially end up paying greater out-of-pocket expenses than the actual amount you would be covered for!Â
Many find that they cancel their funeral insurance early, leaving them without any benefit at all. This means you may have been paying years’ worth of funeral insurance premiums that is money down the drain! It’s important that all aspects are understood before purchasing this type of insurance because some policies do not refund previously paid amounts, however others may do so.Â
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Funeral insurance can be misleading for consumers.
In one case, referencing a Sydney Morning Herald article, a mother spent $18,000 on funeral insurance premiums since the 1990s for herself and two daughters, who were aged one and two at the time the policies were issued.
In another, a mother paid $22,000 in funeral insurance premiums for herself and her daughter, who was signed up to the policy when she was a four-year-old.
The Consumer Action Law Centre Australia also referred to the sale of funeral insurance as ‘unethical’ and when it comes to covering young Australians, said there had been many cases of people spending thousands of dollars more in premiums than they would ever be paid back over the life of their insurance policy.Â
Can I get a refund on my funeral insurance policy?
Depending on your case, you may be eligible to obtain a refund on your funeral insurance policy. Claimo is here to help. Find out more on how to obtain a refund via our Funeral Insurance Refund page which explains exactly how Claimo has helped hundreds of Australians. Â
Start your claim today
Claimo offers a service to help check your documents or request relevant paperwork for free.
