Johannesburg, 25 July – The costs of burying a loved one with dignity are soaring and with a recent report estimating that the average South African funeral now costs between R 40 000 and R 60 000, insuring for the inevitable has become just as important as taking out life insurance. Moreover, it is just as important to make sure that you know just what you are buying.
Felix Kagula, Head of Long-Term Propositions at Standard Bank points out that funeral insurance is a form of life insurance. The difference between the two is that a funeral policy usually has much lower premiums, is for a smaller amount and is paid out quicker than would be the case in a full life policy.
“What the two have in common is that they are about safeguarding the family left behind and are, therefore, part of a personal legacy. By having funeral insurance, you are making sure that family members are not left with the financial burden of paying for a funeral. You are also showing in a tangible way that you have considered their needs once you have passed on and made provision.”
Other benefits of funeral insurance include:
- Policies can cover an entire extended family and include relatives like uncles and aunts in addition to immediate family members.
- Financial help and funds are available at a time of high stress for the family.
- As funds are available quickly, there is no need for family members to cover the costs first and then claim later.
- Funeral options provide funds for everything from emergency phone calls to catering, transport and other essential that are part of a modern funeral.
“As with any insurance, the better you understand the policy, the less likely your surviving family are to suffer a bad surprise when the time comes to claim. When buying a funeral policy, you should consider:
- Exactly what is being covered. These days, it is common for employers to offer funeral cover as part of benefits packages for employees. Don’t take things for granted. Examine the terms of the policy to see who and what is covered. As it is a work policy, it may not include family members or provide funds for all aspects of the funeral service.
- What you want. If the policy covers just your needs, consider what your premium covers. It doesn’t make sense to pay for services you may not want.
- That the premiums are affordable. If the monthly payment stretches your budget, there is a strong possibility that you may not be able to pay at some point and will lose your insurance cover. Often, premiums rise to cover inflation. To be safe, you should include the possibility of annual increases in your budget.
- Always checking that you are paying for what you receive. Legal limits apply to some coverage. Legislation specifies the levels of cover that we can offer to children, depending on their ages. If you are offered benefits that do not meet legal requirements, think twice before signing up.
- Checking when a policy will not pay out. These may differ between companies, but many policies will not cover you or family members who die when taking part in a crime. Others also exclude deaths that result from war or those that occur during civil unrest. Also consider that if premiums are not paid, the policy will lapse, and all benefits will be lost.
- Checking if the policy offers any value added benefits. Some policies offer benefits that can be used whilst still alive, such as access to an ambulance, and medical and dental visits.
“One of the most important aspect of funeral insurance is choosing a beneficiary wisely. The beneficiary will be the recipient of the funeral insurance payout. He or she will be responsible for carrying out your final wishes and must be somebody you trust. You should also, therefore, know that whomever you choose knows precisely what kind of funeral you want.”
“Life is unpredictable. By buying funeral insurance, you are taking care of others. Your actions will ensure that a money problem does not add stress to an already painful time in your families lives,” says Mr Kagula.
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— Arrive Alive (@_ArriveAlive) November 22, 2018