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Check the policy

It pays to check the policy before signing up to funeral insurance.

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Following our March life insurance article, one of our members got in touch about the stand-down period in his funeral-insurance policy.

About a year ago Peter purchased a Cigna funeral-insurance policy. He was attracted by the guaranteed acceptance without any medical questions (and also by the fact that the policy is targeted at “older” people aged 55 to 85).

Peter drew our attention to the stand-down period for death from natural causes. The Cigna policy covers accidental death from the time the policy’s taken out; it doesn’t cover death from natural causes until the policy’s been going for 24 months. If the policyholder dies of natural causes within the first 24 months, Cigna will refund 100 percent of any premiums paid but won’t pay out for the funeral.

This is typical of funeral insurance offered by other companies too – so it does pay to check the policy before signing up.

By comparison, our recent life-insurance survey found that some companies provide up to $15,000 for funerals in their standard “term” life-insurance policies – and this is paid out ahead of the rest of the life insurance. (Cigna also provides for funerals in its standard “term” life insurance but the funeral payment arrives at the same time as the rest of the payout.)