After a death in the family, worrying about funeral arrangements, before and after ceremony expenses should not be a concern.
There are numerous insurers who offer funeral cover, and before choosing one, there are a few important points to consider.
The Association for Savings & Investment SA (Asisa) states that "only companies registered with the Financial Services Board (FSB) can sell funeral policies."
This means that you need to make sure that the financial services provider number and the name of the insurer is shown on your policy provider’s documentation.
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1. What Are The Types Of Funeral Cover
Asisa's Deputy Chief Executive, Peter Dempsey mentions the importance of being aware of your policy.
- Stand alone funeral insurance - This only covers you as a funeral policy.
- Funeral as an add-on to life policy- This is when your life policy includes a funeral cover clause.
“Usually, life cover does not pay out in time to finance a funeral, while funeral policies are designed to pay out quickly."
A stand-alone funeral policy might be a better idea. This ensures that finance is available in case an unexpected tragedy strikes.
2. What Are Exclusions And Waiting Periods?
An exclusion clause refers to situations and instances that may be excluded from your policy.
When you sign up for a funeral policy you will be asked a variety of health-related questions. If you, for example, have had a heart attack within the first 30 days of you taking out the policy, your policy will not cover it.
It is imperative that you ensure that you check this with your insurer when you inquire about a policy.
There is also a standard waiting period of 30 days on your policy. This means that you may not claim before the first month of having the policy.
3. Who Sold You Your Policy?
Whichever route you choose- whether it be a funeral parlour, church or intermediary adviser - make sure that your policy is underwritten by a registered long-term insurance company.
4. Who Are You Insuring?
- Yourself- This ensures that your death does not put any unnecessary expenses on your family.
- Your Parents- Most individuals will take out a funeral policy for their parents as they get older. Many times, parents are"over insured". This means that parents will have additional cover over and above their own personal insurance.
- Your Extended Family- This might include aunties and uncles in your family. It might be a better option to rather look into an emergency fund.
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5. What Services Does Your Policy Offer?
This is something you should ask yourself. It is advisable that you check these important points with your insurer. You can start by finding out the following:
- Is it easy to submit a claim?
- How can I change my policy?
- Is it difficult to lay a complaint?
- How fast are claims paid?
- Are there any legal limits?
6. What Are The Bonuses And Benefits?
Some funeral policies do have the odd benefit attached to them, so it is best you check your policy for this.
Here are a few examples of benefits that can be found on various funeral plans:
- Education benefit - If the deceased was paying for a family member's education, the education will be paid for over a 12 month period;
- Grocery benefit- The family of the deceased will receive grocery for a 12 month period after the death of their loved one;
- Paid-up benefit - Once the policyholder has died payment on the policy ends, however, the family who falls under the policy are still covered;
- Ambulance and transport in the event of a life-threatening situation;
- Transport of the deceased and family members to the funeral;
- Trauma counselling.
7. Some More Fundamental Points To Consider
- Should you pay your premium late, you are entitled to a one month's grace period
- You are entitled to accidental death cover after your first premium
- If you have a lump sum pay out, then the money should be paid out directly to the beneficiary. This clause is regardless of the cost of the funeral. This means that if the funeral is R40 000 and you are covered for R65 000, then your insurer is liable to pay you out the entire R65 000.