When taking out an insurance policy, it's crucial that you understand exactly how much you're paying and exactly what you're covered for.
But how can this possibly be achieved if the policy holder is an infant or small child?
Perhaps we should ask the team at Aboriginal Community Benefit Fund (ACBF), the largest funeral insurance company catering for Aboriginal Australians.
After public pressure and increased media attention, Aboriginal Community Benefit Fund have revealed that around one-third of their customers are under the age of 20, so surely they must have some way of helping their younger customers appreciate the terms and conditions of their policies?
The ACBF points out that their policies are generally not taken out by children, but by their guardians or caregivers.
However, following complaints that funeral insurance providers are targeting vulnerable indigenous Australians — particularly children — with increasingly unaffordable policies, company watchdog Australian Securities and Investments Commission (ASIC) has felt the need to investigate further.
Carers and advocates are claiming that the insurers are creating fear to sell the expensive policies by preying on strong indigenous cultural belief systems around death and funerals.
Aaron Davis from the Indigenous Consumer Assistant Network in Cairns tells the ABC that many people are "already living on the poverty line", but because funerals have "extreme cultural significance to Aboriginal people", they continue paying for their expensive funeral policies even when they're not making ends meet.
"They want to know their funeral is catered for but there are better ways of doing that," he says.
Peter Kell, ASIC deputy chairman, adds that it appears "many consumers do not understand important features of the product until after they have signed up."
He also confirms, "Indigenous consumer advocates and legal groups regularly tell ASIC that a lack of understanding and knowledge about the features and range of funeral products leads to consumers signing up to products that are expensive and do not suit their needs."
ASIC have been investigating the industry for some time and its most recent enquiries have resulted in some shocking revelations, says federal Human Services Minister Stuart Robert, who was horrified that so many young children could be signed up for funeral insurance.
"There are cases where there are children under 10 who have been signed up for this product, they could pay $100,000 in their lifetime," Robert says.
A six-figure sum is a truly staggering figure to pay for insurance that covers an event that may cost just 5 per cent of the premium paid over a lifetime.
According to the federal government's Money Smart advisory service, funerals can cost as little as $4,000 for a basic cremation, through to around $14,000 for an elaborate casket, burial and flowers.
It's somewhat unsurprising then that the Insurance Law Service of the Financial Rights Legal Centre (FRLC) has published a pamphlet, Why you DON’T need funeral insurance! which aims to educate consumers about the many ways they can cover the cost of a funeral without insurance.
They created the pamphlet — which highlights other options such as prepaid funerals, funeral bonds, savings accounts, superannuation and life insurance within superannuation — in response to an increasing amount of enquiries from consumers complaining that they couldn't afford their rising funeral insurance premiums.
ASIC has made a number of recommendations to the industry, including a suggestion that they provide an upfront estimate for consumers of the total cost of the policy.
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