Many South African consumers are overinsured in terms of products like f unera l cover, a FinScope study suggests. This 2013 st udy s et out t o be nationa l l y r epresentative of cons umers’ perceptions on f i nancia l services and issues. It reveals that of those people who have funeral cover, the majority have at least t wo funeral cover products.
It f urther notes t hat t he t rend seems to lean towards having more than one t ype of funeral cover while a signif icantly higher proportion of people who are burial society members also have a funeral policy, either with a bank or insurance company.
Vusi Mutiti, a wealth manager at Inkunzi Investments, says that over the past few months they have been working at resolving the overinsurance issue of many of the clients they have brought on board.
“Many of these clients aren’t even aware that there are policies that have been taken out on their behalf, sometimes more than one from different providers,” says Mutiti. “Many people simply do this as an investment plan of some sort in that they expect to get a payout when the insured has died.”
Mutiti says this is prevalent among the f inancially illiterate communities.