While we all know death is inevitable, most of us don't know exactly when it's going to happen. We do know we can prepare for the expenses that are associated with a death. Let's face it, we all want a dignified send off for ourselves and our family members.

When it comes to covering funeral expenses, you can choose to take out a funeral plan from a financial services provider, or you can choose to join a community-based burial society. But what are the differences between them? Read on to learn more about the differences between a funeral policy and a burial society.

1. Formal vs Community-based

There are two options to consider when looking at covering funeral costs. There's the formal, more regulated funeral plan as provided by financial services companies. And then there's the community-oriented and supported, less regulated burial society.

What is a burial society? How do they work?

Burial societies were created by communities to address the very real need of having to pay for a funeral. The amount of money required for such a solemn affair was seldom readily on hand for most of the population.

Aburial societytypically consists of members of a community who contribute a monthly fee but are not bound by a contract. The society is governed by a constitution, and there are rules as to how many family members you can cover and how much should be paid out.

It’s different from a stokvel in that pay-outs only occur when there is a death (either of the member or a family member), and a new member can only benefit after a three-month waiting period.

How does funeral cover work?

When you take out funeral cover, you enter into an agreement (contract) with a financial services provider (FSP). You commit to paying a monthly premium, and the FSP commits to looking after your money. You’re able to choose from different plans depending on how many people you want to cover, for example, immediate and extended family, like parents, grandparents, uncles, aunts, and more.

You can opt for and enjoy additional benefits, such as a grocery and education benefit to see the family through a set number of months after the funeral.

If you stop paying your premiums, you lose your plan.

2. Pay-outs

A burial society is in a better position to pay out faster (there is less of a need for formal documents such as death certificates as the member is/was known to the community). Many go as far as giving you social support by helping with funeral arrangements, cooking food, and providing emotional support.

With a funeral plan, the funds are invested and used to pay out a single tax-free pay-out when a valid death claim is submitted. Pay-out times vary but if all the documentation is accounted for then you can expect payment within 48 hours of submitting a valid claim.

Which cover is best for me?

Deciding on which funeral cover is best for you is a personal choice. You may want the sense of community you get to experience with a burial society. On the other hand, the extended benefits offered by a funeral plan could be better suited to your needs.

If you need professional help in making a decision, please chat to one of our friendly advisers by requesting a call back. You can also get an online quote for funeral cover.

If you are an existing Old Mutual customer in need of assistance, please visit our claims page. You can also download the Old Mutual app to stay up to date with your funeral policies. Visit the Apple App Store, Google Playstore (device-dependent) or Huawei App Gallery to get started.