Life must go on after the funeral
28 May 2014 | Life Insurance | Funeral Cover | Alex Ollewagen, Metropolitan
The financial realities for most South Africans are tough. The majority of the country’s income earners are simply trying to make ends meet. Most are living from day-to-day and not making any provision for families to cope with living expenses such as debt repayments, home loans, school fees, groceries, etc. if the primary income earner was to become critically ill, disabled, or was no longer there to support them.
Most South Africans understand that funerals are expensive and do their best to alleviate the financial burden on their dependants by taking out funeral cover or through a burial society, but that’s where they tend to stop making provision for themselves or their loved ones.
Let’s use Thabo* as a real-life example. Thabo is a policeman that was recently widowed when he lost his wife Funeka* in a tragic car accident. The same car accident left Thabo with crippling back pain, severely limiting his employment options. While he had the funeral cover necessary to give his wife a dignified send-off, if it hadn’t been for Funeka’s life cover and his disability cover, he would not have had the funds available to cover his family’s living expenses.
Research done by financial services company Metropolitan suggests that there is a high awareness level of the need to get risk cover, such as critical illness, disability or life cover. However, there may be reluctance to do so because of the formality, perceived complexity and cost of the insurance offerings available.
Alex Ollewagen, Actuary at Metropolitan, says: "Many consumers are comfortable with informal insurance products because they are clear, understandable and easily accessible. One potential pitfall may be that they do not always provide the necessary security and formal legal protection. These informal arrangements also can’t offer insurance cover”.
The solution, says Ollewagen, is for financial services companies to develop cover options which can deliver ease and affordability along with security. "At Metropolitan we understand the financial realities of our customers and have recently reduced some of our life cover premiums. Our life cover products cater for flexible premium payments depending on the customer’s changing financial circumstances, and an option to receive cash-back bonuses to reward loyalty if customers meet all their commitments. To cover more needs, customers can add a Critical Illness or Occupational disability benefit to the life cover policy, as well as quick access to a percentage of the cover amount to meet immediate costs in the event of death.”
Ollewagen says: "We all agree that being able to have a dignified funeral is very important, but life, disability and critical illness cover are as important to ensure that you or your loved ones are covered following a traumatic life event. Putting the right cover in place is an essential part of any financial plan”.
