As you progress through life, insurance becomes more important. When you’re young and single, just graduated and entering the job market; you’re unlikely to be thinking about life cover or a funeral policy. However, if you’re the breadwinner for your parents and siblings, it’s something you should consider.
If you have a spouse or children of your own, having insurance in place is even more critical, and helps to protect your loved ones when the worst happens. When you’re gone, you can provide them with money or a regular income.
Why is funeral cover important?
As a provider for your family, there are three reasons why you should look into funeral cover.
1. Avoid leaving your family high and dry
When it comes to covering your bases, there are all sorts of life insurance policies that you can take out. Some will pay out a "lump sum" of money when you (or the person insured) die. Other plans will provide a regular income for your family. There are also plans that pay back your premiums if you haven't claimed in a certain number of years.
Choosing one is down to personal preference. However, it would be prudent to consider where you're at in life. What does your income currently cover (mortgage, groceries, utilities, and/or education plans for your kids)? Consider how your spouse, partner, or family will be impacted by the loss of that income.
Life cover serves a specific purpose, and it can take time to process claims after you’ve passed. By having affordable funeral cover in place, you can ensure this money is solely for your family’s needs.
2. Avoid prolonging the process - funeral plans pay for funerals
A funeral plan is ideal for exactly that – a funeral. The amount paid out should be enough to cover funeral costs. It won't be enough to cover your family's needs for any length of time.
Most financial services companies require you to go for a medical or answer medically-related questions when applying for a life insurance policy. Not so with funeral cover. The requirements are far less stringent.
Let's go back to the young and single, just-finished-school-or-university example. If your family doesn’t have access to funeral cover, you can take out this insurance on behalf of your parents and siblings, and possibly your extended family. Having funeral cover in place for your parents can give you peace of mind for when the worst happens. In addition, the premium is affordable and the payout fairly fast (within 48 hours of submitting a properly documented claim).
3. Dodge the debt
Life insurance policies take time to pay out, up to a few months in some cases. If your family has access to cash to cover your funeral then you probably don't need the additional funeral cover. If they don't, or you don't want to burden them with the cost, then a funeral plan may be something you would like to consider.
Funeral policies pay out much faster than life insurance policies. They'll take care of the immediate costs while the estate is being wound up, so your family can avoid shouldering any additional debt.
Did you know?
Did you know that even if an individual chooses to be cremated the family still has to purchase a coffin? Prices can start from R8,000 and more!
Learn more about the difference between life insurance and funeral cover here.
Which funeral cover is best for me?
To get advice about funeral plans and life cover specifically tailored for you, speak directly to one of our financial advisers.