While many people know that insurance is important, they don’t know the difference between funeral cover and life insurance. For those who are weighing the merits of the two, it’s important that they choose insurance that meets their specific needs. Because life insurance policies and funeral policies cover different things, it might be a good idea to have both.
Funeral policies and life insurance offer financial relief
In the event of your death, there are many costs and expenses involved. From groceries, transport, flowers, a coffin and many more. If you have not financially planned for this, your family may be left with debt. Life insurance, on the other hand, ensures that your family is taken care of, in the long run. This is not only in the case of your death, but also if you become critically ill or disabled. So, while a funeral policy only covers expenses directly involved with a funeral, a life insurance policy can also cover long-term expenses, debts, and your income. Some life insurance policies also include cover for funeral expenses.
Funeral cover is often paid out in a lump sum, vs life insurance which can also be monthly
Due to the nature of the cover, funeral policies are paid out soon after the claim is made, usually between 24 to 48 hours of the insurer getting all the necessary documentation. Insurers know that, in the case of funerals, time is of the essence. With life insurance, the payment may take longer, depending on the type of claim and even the amount being paid out as it’s often far higher. Funeral policy payments are most often paid as lump-sum, whereas life cover can be paid in a lump sum, monthly, or a combination of the two.
Both of these types of cover are about putting less financial strain on families
When a death occurs in the family, the last thing you want is to have to go into debt to cover the costs of a funeral. The good thing about funeral cover is that you can have a number of members of your family covered. The policy can also cover your extended family on your policy, so you don’t necessarily need to have multiple funeral policies. Life insurance provides your family with financial relief during a difficult time, whether it be because of your death, disability, or an illness.
Get a financial adviser to help you
Insurance products can be pretty complicated. Fortunately, many well-qualified financial advisers can answer your questions, and help you understand what you’re buying, when it comes to funeral policies and life insurance. Financial advisers must meet strict regulatory requirements and be properly licensed with the Financial Sector Conduct Authority (FSCA) and product providers.
If you are dissatisfied with the advice you have received, you have the right to file a complaint with the Office of the Ombud for Financial Services Providers (FAIS Ombud). For more information, visit www.faisombud.co.za
Test your knowledge
- A funeral policy:
A: Only pays for burial or cremation
B: Only pays for arranging the funeral
C: Pays for both of the above
- Life insurance cover:
A: Doesn’t include funeral cover
B: Includes funeral cover
C: Can either include or exclude funeral cover
Answers
- C
- C
This consumer education article was made just for you by BrightRock. BrightRock Life Ltd is a licensed financial services provider and insurer. Company registration no: 1996/014618/06, FSP 11643. Terms and conditions apply.