The " Funeral Insurance " Industry !

Funeral insurance advertising must be one of the biggest sources of income for the television companies.  It would be rare to enjoy a night's viewing without being subjected to at least half a dozen advertisements offering funeral cover for a surprisingly low number of dollars each week.

We are repeatedly told that even a no-frills funeral costs about six thousand dollars these days - and the insurer is offering a fast payout of fifteen thousand dollars within a short time after our death - and double or trebling that if the death occurs because of an accident.   Suicide is not covered during the first twelve months of the policy.

What many people fail to realise is that the price quoted is geared directly to our age when we commence the policy.   The following year we have become a year older - and therefore one year closer to the inevitable time that we will expire - and the premium will rise accordingly.

Buying insurance is really a form of gambling.   The insurance company is betting that most people will survive until the usual age at which people die.   If they keep paying annual premiums for that length of time, the insurance company has made a nice profit because it has gained well in excess of the money paid out from those premiums.

The policy holder is betting that if his or her death is premature to the average age of dieing, then the family gains a windfall by a healthy injection of money to more than cover funeral costs.    Death will not impose a financial hardship on the family.

The problem is that those ever rising premium costs can reach dizzy heights when the policy holder reaches age seventy - or even eighty - and these days those sort of life spans are common.    The policy holder becomes hostage to the need to keep paying - because to cease will see the policy lapse - and the expected cover withdrawn.

Customers would be well advised to check the facts carefully and do the sums to understand exactly what is involved.   It is also possible to obtain insurance to cover funeral costs where the premium is fixed at age of entry - and does not increase annually.   This premium is higher, but in many cases it delivers cover at a better outlay if the insured lives to an average age level.

The insurance industry is in the process of revising it's policies and we can expect to see exemptions from further payments over contracted  times that policies have been in force - and even a grant of partial cover if a customer elects to make no further payments after a period of time.

The advertising we see on television looks appealing - but the wise will do their homework and fully understand the implications before they sign on the dotted line !