Funeral cover cash-back benefit
What is a cash-back benefit on funeral cover?
A cash-back benefit pays you back a portion of your premiums after a set period if you have not claimed, as a reward for staying on the policy. It is an optional feature on some funeral policies and usually costs a little more each month. Whether it is worth it depends on the terms, so weigh the extra premium against the cash-back promised.
Key takeaways
- Cash-back returns some of your premiums after a set claim-free period.
- It is an optional feature on some funeral policies.
- It usually adds a little to your monthly premium.
- The payback and the qualifying period vary between insurers.
- Weigh the extra cost against the cash-back before choosing it.
How cash-back works
A cash-back or premium-back benefit rewards you for staying on the policy without claiming. After a set period, often several years, the insurer returns a portion of the premiums you have paid, provided you have met the conditions. It is a way to get something back from a policy you hope never to claim on, which appeals to many people.
What it costs
Cash-back is not free. Policies that offer it usually charge a slightly higher premium to fund the payback, so you are effectively setting money aside within the policy. The exact amount added, the qualifying period and the portion returned all vary between insurers, so the value depends entirely on the terms rather than the headline promise.
Is it worth it?
Whether cash-back is worth the extra premium comes down to the numbers and your preferences. Compare the total extra you would pay against the cash-back you would receive, and check the conditions, such as missing no premiums. Some people value the discipline and the payback; others prefer a lower premium and to insure only for the cover they need.
How to compare policies with cash-back
When comparing, look past the cash-back headline to the core cover: the payout, the waiting period and the premium. Then treat cash-back as an optional extra and judge whether its cost and conditions suit you. A policy with strong core cover and no cash-back can be better value than a weaker one with a payback. Compare quotes to weigh it up. This is general information, not financial advice.