Funeral expenses can be burdensome and overwhelming – this is why funeral polices are the most popular insurance products in South Africa. Funeral policies are designed to offer a financial safety net to families during a very stressful time. They enable people to honour and bury their loved ones with dignity, and without facing financial ruin. They play a critical role in providing financial security during times of loss.
Here are a few things to consider when buying funeral cover.
- Get the right amount of cover for your needs
The South African insurance market offers a variety of funeral policies, each designed to meet different needs and budgets. Determining the right amount of funeral cover involves several considerations. First and foremost, it is essential to estimate the actual costs associated with a funeral, including basic expenses like burial or cremation, as well as additional costs such as catering, transportation, and memorial services. Understanding these costs helps in deciding on a cover amount that will adequately meet the family’s needs without over-insuring.
2. Choose a policy with premiums you can afford
Affordability plays a crucial role in getting funeral cover. Policyholders must consider their financial situation and ensure that the premiums are sustainable over the long term. It is better to have a modest but affordable policy than committing to a high-premium policy that may become unaffordable, leading to lapses in cover when clients need it most.
3. Pay your premiums to ensure you and your loved ones are covered
It’s essential that clients pay their premiums monthly if they want to ensure that they keep their cover. Not doing so can result in devastating consequences. If a client doesn’t pay their premiums for a certain number of months (commonly, two or three consecutive months), their policy will lapse or get cancelled, and they’ll lose their cover. For example, a client has a funeral policy for three years, and they don’t pay their premiums for a couple of months. One of the people covered on the policy passes away during the second month that the client hasn’t paid premiums. In this situation, the client won’t qualify for a pay-out from the funeral parlour as they’ve missed two premium payments.
It’s essential with any insurance product that the client keep up with their premiums to continue enjoying cover.
4. Understand the terms and conditions
Ensure that you understand how your funeral policy works. This includes pay-outs, waiting periods and exclusions to name but a few. Most funeral policies have a waiting period before a client can claim for death due to natural causes, for example, six months. Death as a result of suicide typically carries a 12-month waiting period. This means that the funeral parlour won’t pay out if any of the people covered on the policy die as a result of suicide in the first year of the policy.
Speak to your funeral cover representative to make sure that you understand exactly how much you’ll pay, how much you’re covered for, who is covered, and when the cover will pay-out.