Funeral policy a dead end for couple
ELEVEN years and $10,000 after Matthew and Helga Cashen invested in a funeral plan, skyrocketing premiums have forced them to cancel the plan and forfeit their money.
They were recently informed their premiums, which began at $20 a fortnight for two $6000 funerals would rise from $51.34 a fortnight to $71.33 a fortnight. The rise of nearly 40% was the last straw for Mr Cashen who decided they'd had enough.
The 65-year-old described the policy as a "rip-off" that had very little to do with "planning" for your funeral.
"It (the premiums) just kept going and going," Mr Cashen said.
"I was under the impression when we got to the funeral cost it was automatically stopped and kept as savings for us.
The Goodna couple invested in the InsuranceLine plan only after having to cash in Mr Cashen's long-service leave to pay for their oldest son's funeral, before having to refinance their house to cover the costs of burying two other sons.
The pensioner couple received national media attention last year in a 60 Minutes report on the dangers of rock fishing after the ocean claimed their two sons who were fishing at Double Island Point in 2001.
The couple confirmed InsuranceLine recently offered them a fixed premium option with a greatly reduced benefit amount, but they chose not take it up because of their frustration with the company.
A statement from Tower Insurance that underwrites Insuranceline policies said their Funeral Plans were a good option for many people.
"We recognise there are both advantages and disadvantages to funeral insurance versus other savings. It is our experience that the vast majority of our claims are paid many years before the customer has paid the same in premiums as their benefit amount," the statement read.
Ipswich financial adviser Dave Dobbrick said these types of plans were stacked in the favour of the insurance company.
"At that end of your life your income is at a low level and your ability to service the payments reduces," he said. "You'd have to wonder how many claims they have to pay.
"Some funeral directors have all of the sudden become insurance agents. I sure wouldn't be going to a funeral director to get my financial planning advice."