Category Life Insurance

Old Mutual launches funeral insurance that will help cash-strapped South Africans cover their extended family

18 August 2020 Old Mutual

As part of Old Mutual ‘s new personalised approach to personal cover, they now offer a new generation of funeral cover, designed to provide a dignified burial for everyone in the family.

The number of South African breadwinners known as ‘the sandwich generation’ – who may support their growing children on one side and unemployed or ageing adult family members on the other – is at a historic high of 42%, up from 34% in 2019. At the same time, 57% of earners are bringing home less than they did at the start of lockdown.

This is according to the Old Mutual Savings and Investment Monitor Covid-19 Special Report, released in July, which reveals an unprecedented increase in the pressure felt by survey respondents – close to 60% of whom are experiencing great financial stress.

On top of having less income to fund more dependents, those in the sandwich generation also carry the anxiety of how their families would cope should something happen to them – or to another member of the family. This is according to Thembisa Mapukata, General Manager: Alternative Distribution for Old Mutual’s Mass and Foundation Cluster.

“Our experience is that in some instances, it costs households the equivalent of an entire year’s income to pay for a funeral,” explains Mapukata. “Breadwinners tend to take out funeral policies for the whole family – their spouse/partner, siblings, parents, in-laws and children – but this creates a ‘key-person risk’, which means that if the earner dies, is unable to work, or needs to reduce their expenses when they retire, the family’s cover is compromised. That’s why it’s important to ensure you get the right kind of cover to suit your personal circumstances.”

Old Mutual’s Funeral Insurance addresses exactly this problem. Part of the new personal cover solution, it’s designed to give South African breadwinners the peace of mind that comes from knowing they can give everyone they take care of a proper burial.

“Our solution allows you to cover up to 22 family members and an unlimited number of dependent children but only pay for one dependent child,” she explains.
With the Funeral Paid-up Benefit, monthly premium payments fall away – while full cover continues – when you turn 64 or if you become disabled or die. This means that your family is still insured for funeral costs even when you’re no longer able to earn.

If an insured person dies, a single tax-free amount of up to R100 000 will be paid within hours of receiving a valid claim. The family can choose which funeral expenses to spend it on.

“There is a perception that funeral insurance is old-fashioned, or something that’s just for the elderly,” says Mapukata. “But if Covid-19 has taught us anything, it’s that we should be taking advantage of every possible tool to safeguard our family’s financial future. Having the right protection solutions in place to meet your and your family’s needs, plays a big part in driving what we call ‘financial resilience’ – that is your ability to recover from a financially stressful event, like illness or the loss of the breadwinner in the family. “

A funeral cover solution designed to suit your needs, it provides for a proper burial even when – as in the current economic climate – budgets are severely strained. It is a flexible solution that allows customers to increase or reduce their cover/premiums should their circumstances change.

Funeral cover makes funds for a funeral much more quickly and easily available than if you had to apply for a bank loan, or gather it in some other way. In the case of Old Mutual Funeral Insurance, you can submit a claim online, via WhatsApp or USSD and it’ll be paid out within hours.

This means that your family will not be left with tens of thousands of rands of debt to deal with, in addition to their grief. “Covid-19 has already made many burial traditions impossible. Making sure that our loved ones are taken care of – without being burdened by uncertainty and debt – is an important way to continue your legacy of care and help us sleep a little easier at night,” concludes Mapukata.

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