With funerals in South Africa costing between R20 000 and R80 000 on average, funeral cover has become a necessity if you want to ensure the dignified last rights of your loved ones while alleviating the financial burden at a time of mourning. With an array of policies on offer in the market, it is important to understand your needs as well as what each policy will and will not provide.
Meerkat outlines six factors you may not be aware of when it comes to funeral cover to assist you in selecting the most suitable policy for you and your family.
1. Funeral cover need not break the bank
Funeral cover can be tailored to suit your budget and one size certainly does not fit all. There are many factors that influence the cost of cover and most of these can be adjusted to your personal requirements and budget. In most cases, the more you are paying the more cover you will receive. However, this may not always be the case.
Typically, online quotes and sign-ups will be cheaper than those which use sales agents and brokers.
2. Know what benefits are on offer
Over and above the standard funeral policy cover, many policies offer additional benefits:
- Cash-back no-claim bonuses
- Free airtime for beneficiaries after the passing
- Transport and funeral arrangement assistance
- Groceries
- Grief counselling
- Education benefits for children in the case of unnatural death
- Burial repatriation
- Voluntary policy pause and finance options for premiums during tough times
While many of these benefits may seem helpful, they are ultimately built into your premium. Do you really need all these benefits and are the higher premiums really worth it? Should you rather open a savings account for these additional costs?
Ever wondered How do you choose the best funeral cover in South Africa?
3. Rates of increase in premiums and cover vary
When choosing a policy, many people only look at the initial level of cover and the initial premium. Be careful to compare how premiums may increase over time as well as how the benefit increases over time, if at all. Two policies may look very similar at the start, but after five years how much will you be paying and how much will the benefits have escalated in line with inflation?
One hopes that funeral cover is a relatively long-term investment, therefore it is very important to take a long-term view of the policy when making your choice.
4. Group Policies are often cheaper
A group policy is one that provides cover for more than one person, for example, immediate or extended family members. By including more than one member on the policy, the insurer is better able to mitigate risk factors. This, in turn, will lower the overall cost. To clarify, having a single policy covering a husband, wife and two children will likely be a lot cheaper than having four individual policies.
5. Limited-Term Policies vs Life Policies
Limited-term policies have an expiry date at which time the policy expires, meaning you will need to then have to sign up for a new policy. This will likely be a lot more expensive because of your age. Life policies do not expire. In fact, some life policies reduce or even stop premiums after a certain age while the policy remains fully in place.
A limited-term policy will usually be considerably cheaper at the start of the policy, but be aware of the cost after expiry. This will usually be after retirement, usually a time when you will most need to reduce your living expenses.
6. Life cover vs Funeral cover
It is a common misconception that life and funeral cover are one and the same thing. Life cover aims to assist those you leave behind with financial stability and security.
Funeral cover aims to simply provide your loved ones with the means to deal with the immediate challenges of your passing.
Our funeral policy is underwritten by Old Mutual Alternative Risk Transfer Limited, part of the Old Mutual Group. They have been paying claims for over 170 years so you can rest assured that you are in safe hands.
Take our Funeral Cover Quiz!
Once you’ve decided what you require from your funeral cover, get a quick and easy online quote and purchase your policy online.