What is funeral cover and how does it work?

Life comes with many unpleasant realities and death undeniably tops the list. Thinking about yourself (or a loved one) no longer being around to laugh, smile and be present for upcoming milestones like weddings, promotions and births isn’t pleasant. That being said, avoiding all mentions of it will do more harm than good. In fact, setting aside time to face the reality of how death can impact your life can reassure you and lay your fears to rest. The simplest way to do this is by taking steps to manage what will happen immediately after someone passes away. If you’ve ever asked yourself ”what is funeral cover?” or “why is funeral cover important?” then Budget Insurance is here to answer your questions. Here’s what you need to know.

Why is funeral cover important?

Funeral cover enables you to cover all the expenses associated with laying a loved one to rest. Thinking about how you’ll pay for a funeral is admittedly unnerving. Despite this, it’s necessary to think about it ahead of time, and not to wait until death happens. Death happens when we least expect it and Covid-19 shows us how quickly reality can change. Just a few years ago, the Coronavirus was an unknown illness. Last year alone, it caused more deaths in South Africa than cancer, car accidents, heart attacks, strokes and other causes of death combined.

Not only can death happen to the healthiest among us, but it can also cost more than you can afford. It might come as a surprise to you but South Africa is the fourth-most expensive country in the world to hold a funeral in[1]. There’s a good chance that even if you’ve put aside money for it, that it won’t be enough to cover everything you need or want. And unlike other major life events, funerals don’t offer you the chance for a do-over.

What does funeral cover include?

Funeral cover is an insurance product that you pay towards every month to cover the burial and funeral of yourself or other members of your family. In the event of a death, you’ll receive a predetermined lump sum payout that you can use to cover these costs. This payout often comes with added benefits over and above your payout.

If your next thought after understanding what defines funeral cover is to ask “what is the best funeral cover in South Africa?”, you should know that funeral coverage will differ from provider to provider. Providers that go above the bare minimum will offer the following: 

• Cover for a main member or their spouse and up to five dependents aged 21 and younger (or under 25 for full-time students)

• Immediate cover for accidental death or natural death, including from HIV/Aids-related illness after 6 months

• Repatriation services within the borders of South Africa

• Coverage for suicide or attempted suicide after 24 months, excluding incidents related to insanity, mental illness or substance abuse

How does funeral cover work?

The process of how funeral cover works is simple. Upon someone passing away, you’ll need to complete a claims form and send this through with a death certificate to your insurer. You’ll then receive the money in your account. Before you start looking for a insurer, however, there are a few questions you should address:

Is funeral cover part of life insurance?

Funeral cover is not part of life insurance. They are two similar but complementary insurance products. 

What’s the difference between life insurance and funeral cover?

Funeral insurance is meant to cover the cost of someone’s funeral and burial. Life insurance is meant to cover the fallout of losing a family member, and the payout and premiums are usually much higher. If you don’t have funeral cover, you can use your life insurance payout to pay for a funeral, but this will cut into funds meant to cover future bills like school fees, rent or bond payments and groceries. 

How many funeral covers can one have?

The law usually prohibits more than one funeral cover policy for a single person. You can, however, insure different family members with different policies or insurers. For example, you can select a special form of funeral cover for family members over 65 years.

What are the benefits of funeral cover?

Funeral cover allows you to put away a small amount of income monthly with the assurance that you’ll be covered in full for all your funeral needs. Financial experts are constantly telling us that we should be saving money for a rainy day. We all know that this is easier said than done. Bills are constantly clamoring for our attention and even when we do save, it’s not always possible to create multiple savings accounts dedicated to different possible future costs. 

With funeral cover in place, you won’t need to deal with the stress of planning a funeral while also worrying about dipping into your savings or asking for donations from others.

What’s the best funeral cover in South Africa and where to find it?

Now that you know the answer to the question “what is funeral cover”, you have a better idea of what it usually includes and what to look for when choosing an insurance provider. You’ll be happy to know that Budget Insurance can offer you the coverage you need — and life insurance for added peace of mind. Request a quote from us today for more information.

The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.