According to a study done by FinMark in 2017, 55% of the South African adult population have funeral cover. This stems from a long-standing cultural belief that a person should get a dignified funeral. The cost of a funeral could range from anywhere between R6 000 and R80 000, considering the costs incurred before the funeral day such as transportation of the body and mourners, tombstones, gravediggers and morgue expenses. Even visitors who come to grieve with the family cost money.
There is however, a disconnect between people’s funeral essentials or priorities, and the products they eventually take up with insurance companies. For instance, in a recent research report conducted by Assupol, clients were asked what was important to them. Educating children, financial security and a comfortable retirement were the top responses – although their behaviour has indicated that they have put a great deal of money and effort into funeral preparations. Therein, the disconnect.
Many people in rural areas, and an increasing number in more urban areas, have come up with alternative savings
vehicles in an effort to soften the financial blow brought on by the loss of a loved one. These self-insurance strategies include communal burial societies and stokvels, which go a long way in financially supporting families who have lost one of their own, but financial shortfalls are commonplace. This is where formal funeral cover comes into play.
Burial societies have relationships with funeral parlours, which are underwritten by insurance companies. Burial societies are entitled to some cash benefits, it is advisable to ensure that you know what these are.
One of the benefits of having funeral cover is the peace of mind it brings, particularly during an already stressful and emotional time. There are a variety of insurers who offer funeral cover, the trick is to know which one to pick. Below are some tips on how to get funeral cover that best suits you, and your family:
Everyone who has a policy with an insurance company needs to review their beneficiary list once a year. In the case of death, insurance pays out to nominated beneficiaries. Changes in family structure need to be reflected on the beneficiary list.
There is still life after death beyond the day of their funeral and if possible provide for security of their loved ones when they are gone. It is advisable to visit a financial adviser to ensure that your family’s future is secure.