Many South Africans have a funeral policy in place to help their loved ones bury them without the financial stress. Without a funeral policy, your loved ones could face last minute out of pocket expenses that can be stressful during such a sensitive time.
Knowing the pros and cons that come with funeral cover can give you a better understanding of your policy. It can also reveal if you will need any additional cover such as life insurance to make sure that your loved ones are adequately covered. Here is how to compare your funeral policy features to get the most out of it.
The pros of funeral cover
Burying a loved one with dignity is something we all want to do, but without the proper preparations in place, it can leave your loved ones scrambling to cover expenses. The benefits of having a funeral policy are:
Being covered from the first day you take out the policy.
You can cover family members under one premium. For example, with MiWayLife, you will be able to cover your spouse and up to 8 of your biological, adopted or step children, 4 parents and 8 wider family members under one premium.
Your premiums are tailored to be affordable to your needs. Insurers use the underwriting process to ensure that they do not charge you more than what you can afford, but that you also have a policy that will adequately meet your needs.
No medical exam is required during the underwriting process.
Funeral cover payouts are processed with 24- 48hrs of placing a claim.
Eases the financial stress on your loved ones to carry out the burial.
The cons of funeral cover
Not all funeral covers are the same, which is why it is important to carefully read the terms and conditions that come with your policy. It is also important to check that the cover amount will adequately cover your funeral needs. The average South African funeral can cost anything between R23,500 – R86,000 depending on how big it is. Having a shortfall can cause financial stress to your loved ones. Some of the cons that you need to consider are:
There could be a cap on the cover amount. Some life insurers cap their cover amount at R10,000 which may not be adequate for the type of funeral you may need.
It comes with a waiting period. Every funeral policy has a waiting period. This is a time frame that must pass before the benefit kicks in. This period will differ from insurer to insurer. Should the policy holder or the beneficiaries pass on before the waiting period is over, the claim may be denied.
Funeral cover comes with a suicide exclusion that does not cover deaths that have occurred within the first 12- 24 months. What this means is that should the policy holder or the beneficiary that is covered under your policy pass away due to suicide within this period, the claim could be denied.
Things to consider
While having funeral insurance can give you peace of mind knowing that your loved ones will be assisted financially to cover the funeral costs, it is also important to look beyond the funeral day. More so, if you have people who are financially dependent on you.
Who will take care of their financial needs when you are no longer able to? Having life insurance can ensure that their needs are taken care of long after you are gone. They will be able to cover daily living expenses, pay off any debt you may have accumulated, educational fees, mortgage fees, or any other expenses that may arise in future. Now that's peace of mind.