Funeral insurance should be pitched at culture and tradition rather than income
23 April 2014
Cita Penn, Sanlam Sky Solutions
In early April, Sanlam Sky Solutions launched a range of five funeral insurance plans named the Sanlam ‘My Choice’ Funeral Plans. The range places its focus on delivering benefits that speak to the culture and traditions of all South Africans – rather than targeting only lower and middle income earners. Among the associated with the products are family income, grocery and memorial benefits.
Cita Penn, head of client solutions at Sanlam Sky Solutions, says that one of the misconceptions about funeral insurance in South Africa is that it provides cover only for low and middle income earners. "Each member of a family members deserves a dignified funeral at death whether the family earns R5 000 or R50 000 per month. High income earners often support multiple family members and can just as easily be short of cash to cover funeral costs when a death occurs.
"In line with this, we have developed our new funeral products from a cultural and traditional perspective rather than simply using them as a tool to improve insurance penetration among the lower income earners,” says Penn.
Each product is tailored to match a specific consumer’s needs – starting with the ‘basic funeral cover’ offered in the My Traditional Funeral Plan and culminating in the comprehensive suite of benefits in the My Prestige Funeral Plan.
The offering includes Memorial Benefits and Grocery Benefits which both stood out as important considerations during consultations with intermediaries and consumers. "The Memorial Benefit allows the insured to pay tribute to their loved ones by placing a tombstone at the grave site as appropriate,” says Penn. "And the Grocery Benefit remains popular to help cover basic grocery purchases upon death or physical impairment of a breadwinner.”
A further feature is that the funeral cover can be extended to all family members on a policy upon the death of the policyholder (subject to the product chosen). The My Priority Funeral Plan, for example, allows that all lives assured on the plan to continue to receive funeral benefits even after the policyholder dies or becomes physically impaired.
Other benefits built into the higher end of the new product range are the Family Income Benefit to help the bereaved family with household expenses after death or physical impairment of the principal life assured and a ‘no more premium’ benefit upon retirement or retrenchment.
The ‘My Choice’ Funeral Plans were developed after extensive consultation with Sanlam’s intermediaries and incorporate the results from numerous client focus groups. "We had to find out which benefits ‘worked’ and which did not and make hard decisions on which to retain and which to drop, and which were the ‘must haves’ for future success,” says Penn.
The true test of a new product is how well it does in the marketplace. Sanlam will rely heavily on its agency and broker distribution forces to market the ‘My Choice’ range. The group also hopes that the flexibility of its five product offerings will be positively received by independent brokers.
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