You can get the best of both worlds with a funeral and life cover policy under one premium, but before you sign your name on the dotted line, there are a few things to keep in mind.
The benefits of getting a 2-in-1 policy
Funeral and life cover policies serve different purposes. Having a funeral cover is a great way to help loved ones carry the cost that comes with a funeral. Life cover ensures that your loved ones can move on with life with a financial safety net that will take care of all of their needs. Combining both under one premium can be an affordable option for people who want to provide an all-round financial safety net for their loved ones once they have passed on. It also means that you won't have to keep track of multiple policies and payments.
How will doing this affect the payout?
If you decide to take out a policy with an insurer that offers a combined funeral and life policy, it will affect the overall payout. For example:
Thabo decides to take out a 2-in-1 policy with MiWayLife. He chooses to take out a life cover amount of R500,000 for his loved ones with a built-in funeral cover of R50,000. His loved ones then inform his insurer about his passing which begins the claims process. Within 24 hours, they receive a payout for R50,000 from the built-in funeral cover leaving the remaining life insurance amount at R450,000. They are now able to pay for the funeral expenses and also have the remaining R450,00 from the life cover payout to spend on any expenses they may want to pay for.
Having a built-in funeral policy offers people the opportunity to tap into the best of both funeral and life cover under a single premium, which can be an affordable solution compared to having two separate policies.
What are the key features you need to consider?
The truth is that your situation differs from the next person. Therefore, insurers take you through a process of questions known as the underwriting process to find a suitable policy for you. However, you also have the opportunity to assess if a policy is something that will be suitable for you and your loved ones. When checking if a policy is right for you check features such as:
How much life cover you need. Using an online calculator can give you an immediate answer to how much life cover is enough for you.
Cover amount for a funeral policy. Knowing the costs of carrying out a funeral cover can give you an idea of whether a cover amount is enough. You are able to get a funeral cover at a cover amount of R10,000 to a maximum of R100,000 in South Africa for people who are 18 years and older.
Reading the inclusions and exclusions is something that should be done carefully. This is your guideline on whether you qualify and whether you will be covered when it is time to make a claim.
Check if terminal illness cover is included. There are insurers that allow you to take out 50% - 100% of the amount to help deal with the expenses of being diagnosed with a terminal illness.