Funeral Cover
Funeral cover is a small policy that pays quickly. It exists for one reason: a funeral has to be paid for within days and life cover takes weeks to assess. It is written as assistance business, a separate part of the long-term licence with its own rules and its own ceiling.
One clause decides almost every funeral claim, and it is the waiting period. Everything else on this page is worth reading. That one is worth reading twice.
Cover
What this typically covers
A benefit that settles in days
Money in the family's hands while the arrangements are being made. The undertaker is asking now, and the life policy will take weeks.
A stated sum payable on death, assessed on documents rather than through underwriting, and paid within a short period set out in the policy.
Who can be covered
This is the one class where you can insure people you do not live with. Parents and parents-in-law are the usual reason a policy exists at all, and each person added carries their own terms and usually their own waiting period.
The principal member, a spouse, children, and extended family including parents and parents-in-law, on stated terms for each category.
The waiting period
The clause every claim turns on. For the first stretch after you take the policy out, a natural death is not covered, while an accident usually is from day one. Adding a person later starts a fresh one for them.
An initial period from inception during which death from natural causes is not covered, ordinarily shorter or absent for accidental death.
What the premium does
Some you pay for as long as you live, including the years you can least afford to. Some stop needing premiums at a stated age. Almost nobody asks which one they bought.
Whether the premium is level or rises with age, whether it escalates annually, and whether the policy becomes paid up at a stated point.
Who receives the money
It goes to the person you named, directly, without waiting for the estate to be wound up. That is what makes it fast. It also means the nomination has to be current, and it is usually the thing nobody has touched since the policy was taken out.
Payment to a nominated beneficiary, made outside the estate and without waiting on the executor.
What it is not
A funeral policy is capped in size by law. Stacking several of them is an expensive way to reach a number one life policy would have covered for less.
Assistance business carries a maximum benefit per life set in legislation, which is why it cannot stand in place of life cover.
Limits
What this will not cover
Natural death inside the waiting period
The claim declined most often, and the one families are least prepared for. Accidental death is usually covered from the start and natural causes are not. Moving to another insurer restarts the period, which is why a cheaper premium elsewhere is not always cheaper.
A policy that has lapsed
Assistance premiums are small, which is exactly why a failed debit order goes unnoticed. Cover carries a short grace period and then it stops, and the family finds out on the day they claim. Check that the deduction is still going off.
People added later, and people never added
Each life on the policy has its own start date and its own waiting period. A grandchild added last month is not on the same terms as the member who has been covered for years, and a relative you meant to add is not covered at all.
Suicide in the opening period
As with other long-term policies, death by suicide within an initial period from inception is excluded. The period is stated in the policy, and it starts again if the policy is replaced or reinstated.
Claim
When you claim
Claim in days, and it is meant to be simple
This class is assessed on documents and not through a medical investigation, which is why it can settle quickly. The identity document, the death certificate, the notice of death and the policy number are usually the whole of it.
The person claiming is the person paying the undertaker
The benefit goes to the nominated beneficiary rather than into the estate, so it reaches whoever is making the arrangements instead of waiting on an executor. Where the nomination is out of date, that is where the delay comes from.
An early claim is checked against the start date
A claim in the opening months is measured against the waiting period and the cause of death, which is why both are recorded. Nobody is accusing you of anything. It is the one check this class performs, and it is the reason the rest of it is fast.
Questions
Frequently asked questions
Because this class is sold without medical underwriting. Nobody asks you health questions, so the waiting period stands in for them, and it is the reason a policy can be taken out in ten minutes. Remove it and either the questions come back or the premium does.
Usually yes, and it is the most common reason these policies exist. Extended family cover is written per category with its own age limits, premiums and waiting periods, so what applies to a parent is not what applies to you.
No, and it cannot be. Assistance business carries a maximum benefit set in legislation, which puts a ceiling on how large a funeral policy is allowed to be. It pays for a funeral. Life cover pays for what happens to the household afterwards, and those two amounts differ by an order of magnitude.
It is a common one. Several small policies bought over the years usually cost more together than one properly sized policy, each carries its own waiting periods, and some of them duplicate the same lives. Putting them side by side once is a short exercise with an obvious answer.