Better to save for funeral, regulator says

Australians have been told that in some circumstances they would be better off opening a savings account than taking out funeral insurance.

That's because they're likely to be paying more in premiums than they are ever likely to receive from a payout.

The Australian Securities and Investment Commission conducted an industry review last year after it became concerned about the marketing of funeral insurance products.

While the industry has taken a number of steps to address those concerns, the commission continues to be worried about the targeting of indigenous communities.

"It's extremely distressing ... it's shocking, absolutely shocking," ASIC chairman Greg Medcraft told a Senate hearing on Wednesday.

Also in the spotlight is marketing plans to older people who may be suffering from dementia.

They are unaware they have signed up to three or four funeral insurance plans.

"For many consumers, a savings product is much more suitable," ASIC official Michael Saadat told senators.