Consumer NZ says that funeral cover could be the most expensive way to send-off loved ones. Consumer NZ reviewed 10 policies offering $10,000 funeral cover for a 64-year-old and this is what they found. They found it was expensive, and I agree. Having said that, it may be cheaper than the other ways.
Assuming all goes well, you should not be relying on insurance to meet final expenses when you are over 65. But that is assuming all goes well. The typical funeral costs between $10,000 and $15,000 - varying somewhat on what services are included and the part of the country the funeral is to be conducted in. What we would all prefer happens is that people live a long life, and with good fortune and effective planning, they have been able to get rid of their insurance a long time before final expenses have to be paid.
One way to look at insurance is that it meets a gap between your current financial resources and your remaining life time financial obligations. There are two ways you can reduce your need for cover. The first, to increase your current financial resources: by earning more, saving more, and investing well. The second, reducing your remaining financial obligations: pay off debt, help your kids to get financially independent, and so on. With continued employment, home ownership, and modestly good advice, these have been achieved by many.
But some just aren't that fortunate. Some have struggled and for whatever reason are in a rented home living on NZ super and they have little else besides. In that case they may feel that in order to avoid being a burden, they should cover their final expenses. You may still be able to avoid buying funeral cover if you can work out with friends or family a savings fund. Saving the same premium you would spend on funeral insurance would do the job - after a few years - so provided you have someone to take up the slack in the meantime, that approach could work.