Honour your loved ones by putting funeral savings to good use
Covid-19 rules have cut costs
Burying a loved one in SA can be an expensive business, however families have been spending significantly less on funeral costs due to Covid-19 restrictions.
Liberty says Stats SA revealed in 2018 that the average funeral cost was between R50,000 and R250,000 and this was increasing year-onyear by approximately 12%.
Because of this, many of us take out funeral cover to ensure we have the money to cater for the large numbers of friends and families who join in the send-offs, the life insurance company says.
According to life insurer Stangen, families have made savings of up to 70% of the typical amount claimed on a funeral policy due to the government restrictions on funeral attendance.
“The restrictions have in many ways turned out to be financially beneficial for families, with funerals that used to cost R80,000 or more now costing a fraction of that,” says Marius Botha, managing director at Stangen.
Botha says families are making additional savings on alcohol they would normally buy for gatherings after the funeral as well as on the hiring of transport and marquees. This is leaving families with a lot more cash in hand.
Lindi Monyae, executive for Liberty emerging consumer market, says while some costs of a funeral are unlikely to change – funeral parlour fees, the cost of the coffin and the burial – the sheer drop in the number of people currently able to attend means that other major costs will drop significantly.
Monyae says the current Covid-19 regulations on funerals are “a tough pill to swallow”, but at the very least they may provide grieving families with a little more financial flexibility after the tragedy.
As this is a time of uncertainty and anxiety, redirecting excess funds so that your family’s financial needs are taken care of, will hopefully provide a little comfort, she says.
Monyae says if the payout from a policy is more than the cost of the funeral, families should consider using the excess funds in honour of your loved one’s memory to protect surviving family members.
Dez Tshwaile, independent financial planner and personal finance architect at Emphasis Wealth Advisory, agrees that Covid-19 has brought with it the opportunity to really think about putting to good use the money that becomes available when a loved one dies.
“People plan for death essentially to protect the lifestyle of the dependants they leave behind after a dignified burial.”
Felix Kagura, head of longterm insurance at Standard Bank Insurance, says you should have a clear picture of what you want your family to do with additional benefits, and what expenses they will need paid monthly.
Tshwaile says this means doing what most families struggle with – speaking about death and planning for it – talking about the kind of casket and funeral you want when you do die, and what the money needs to be used for.
“… Death cover and life insurance are not interchangeable and people need to make real financial planning decisions about each aspect of their lives,” he says.
Botha says if you have savings after a pared down funeral, you can use the cash to ensure a prosperous future for your family by settling debts and investing.
“Covid-19 is forcing all of us to review the way we operate. Maybe there is a way to do funerals in a manner that still honours the deceased and is culturally relevant without causing financial distress and uncertainty of the future.”
A plan for your death and the legacy you want to leave behind should fit into your lifestyle and budget. An independent financial planner can help you make an informed decision.
‘‘ People plan for death to protect dependents