Funeral plans and life cover: Why you need both
For many people, the death of a loved one can happen when you least expect it. The COVID-19 pandemic has highlighted how unpredictable life can be.
To properly prepare for these unfortunate circumstances, you must understand the difference between the types of financial products. Funeral and life insurance are 2 different types of product offerings; however, it may be beneficial for you and your family if you invest in both.
What is a funeral plan?
Research indicates that funerals can cost anything between R3 000 and R40 000, and most people may not have access to those kinds of funds. As the name suggests, a funeral plan is intended to take care of the financial costs of your funeral or that of your loved one. This usually includes everything from burial or cremation costs to grocery purchases, catering and transportation costs.
What is life cover?
Life cover, or life insurance, is taken out to provide for the more long-term effects of losing a loved one. It can be a way to ensure that your family has a way to financially support themselves in the event of your death.
Why do you need both?
Simply put, funeral plans provide short-term financial assistance while life cover provides long-term assistance, often of a much larger lump sum amount. A funeral plan, as the name suggests, is only meant to assist with the cost of the funeral and, as such, is often paid out within 48 hours of the claim being assessed.
Life cover provides your family with a financial safety net after the funeral and beyond. With the right amount of life cover, you can ensure that your children’s education, household expenses and bond or rent payments are taken care of once you are gone. The process of submitting a claim can, at times, take longer than it would for a funeral plan, particularly if the insurer believes there is a need to verify any further aspects of the claim or cause of death.
We currently provide a range of affordable funeral plans, from as little as R42 per month, as well as life cover of up to R10 million, subject to terms and conditions. Our financial advisers are also available to answer any questions you may have to ensure that you make an informed decision.