Out of saying farewell
Dealing with the loss of a loved one is always painful, but unplanned funeral arrangements can make the experience even harder. Knowing how to choose a funeral policy that suits your needs is the best way to ensure that the process is as simple and hassle
Most funerals in South Africa are lavish celebrations that are held to honour the person who has passed away. Although these events are generally worth the money because they allow everyone to pay their respects, they can get expensive.
The cost of a funeral can be as much as several months’ salary for the family. It depends on the type of funeral and requirements that the deceased had specified for in their last will and testament.
Religious ceremonies, food and outfits are all expenses that can add up, especially when hundreds of people are involved.
For a basic funeral with a cremation service, the cost is likely to be R7 500, while an average funeral will probably cost R12 500.
More expensive funerals are normally the result of the deceased choosing a bespoke coffin design. Some high-end coffins and caskets alone can cost between R24 000 and R50 000, which can increase the cost of the funeral to between R40 000 and R70 000.
Given the high costs incurred when paying for a funeral these days, it is little wonder that funeral policies are becoming more common.
A funeral policy eases financial worry, and allows you and your family to spend more time making arrangement and providing each other with
WHAT ARE THE BENEFITS OF HAVING A FUNERAL POLICY?
emotional support, instead of worrying about money.
Cita Penn, head of client solutions at Sanlam Developing Markets, says: “If all the relevant documentation is in order, a funeral policy pays out quickly and you won’t have to worry about finding the money.
“In addition to that, funeral policies generally include benefits that will make things easier for you. It eases the burden through a difficult time.”
There are many ways that you can provide for your funeral, including saving your money to build up an emergency fund, taking out a life policy, or buying a funeral policy or funeral plan.
If you have a life policy or your employer provides you with group life cover, the policy may offer a funeral benefit, which usually pays out within 48 hours of your death.
You may not be underwritten, which means your premiums will not be determined by the risk that you pose to the insurer.
A funeral policy, in which a cash benefit is paid out to your beneficiaries, is usually bought from life assurers or funeral parlours, and limited, or no, underwriting applies. A six-month waiting period usually applies.
A funeral plan, where no, or limited, underwriting applies, can be bought from a funeral parlour and burial society or short-term insurer. The plan covers you and sometimes members of
your immediate or extended family.
The different types of funeral policies all have varying degrees of cover and costs. The major benefit of traditional funeral policies is that the insurer pays out a lump sum on an agreed turnaround time.
This is usually 24 to 48 hours after all relevant documentation has been received.
Before making a decision to purchase funeral cover, it is important to first assess your needs and those of your family, both now and in the future.
Think about how many people there are in your family, whether you would be responsible for their funeral and consider how much you can pay towards a funeral plan – without cutting back too much on spending on other parts of your life.
You then need to consider how much you will need to pay for the funeral and pay each month for the policy.
Once you have an idea of how much you can spend on a policy, you should speak to a financial adviser from a trusted insurance provider.
“At the end of the day, the most important thing is to choose the right funeral policy for you and your family,” Penn says.
“It should cover your needs and suit your pocket. Do some research and speak to your financial adviser about the best possible solution for you.”