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Category Life Insurance

Plan your finances to avoid drowning in debt due to funeral costs

28 September 2015 Lee Bromfield, FNB
Lee Bromfield, CEO of FNB Life.

Lee Bromfield, CEO of FNB Life.

The loss of a family member is not only an emotionally challenging experience but it can also be a period of financial difficulty due to excessive costs associated with organising a funeral.

Funeral costs can run up to thousands of rands due to necessities such as travel, groceries and a coffin, to mention a few. In cases where the deceased or their family did not plan ahead by arranging funeral cover, individual members of the family sometimes have no choice but to take up debt to cover the cost of the burial.

According to Lee Bromfield, CEO of FNB Life, “the trend of taking up more debt to cover funeral costs is relatively widespread. However, it is something which can be easily avoided through proper financial planning, which will not only take care of the burial costs but also prevent long-term financial anxiety.”

Lee outlines some of the key considerations in order to avoid being overly indebted due to funeral costs:

Look for family cover

• It is more cost-effective to cover the whole family under one funeral policy, than to look for separate plans to cover people individually - find the one which suits your family’s needs.

Understand the type of cover you are taking for your family

• Funeral insurance has evolved over the years so people need to understand exactly what their cover entails. It is advisable to go with insurance cover which is the easiest to understand and with a specific payout. For instance, some insurers will only pay for a coffin as well as mortuary costs, while others payout a specific amount.

Consistently pay your monthly premiums

• If you pay by debit order, it is important to review your bank statement every month to ensure that your funeral insurance premiums have been paid. This is crucial as certain policies will not payout if the last monthly payment was not received.

Make sure you use a reputable insurer who pays out

• There are many unreliable and untrustworthy funeral insurance providers which operate outside the strict industry regulations. Make sure you use a reputable insurer, with a simple, efficient and fast claims process.

Update any changes to your personal information

• If you are the main member of the insurance policy, it is important to consistently update essential information such as changes in your banking details, salary dates, address or contact details. This will enable you to keep your cover in good standing.

“The loss of a family member is a heavy burden which should not be made worse by the anxiety of seeking finance for a decent burial. At FNB Life, we encourage clients to look for a solution which meets their individual and family needs - hence we cover up to 21 people, have the simplest claims processes and payout the majority of our claims in 24 hours. Proper planning is crucial in ensuring that your family members get a decent burial that will not cause long-term financial strain,” said Bromfield.

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