What you need to know about funeral cover – expert advice

Death sometimes comes when we least expect it. This means you might not have the money to cover funeral expenses, which is what makes funeral cover important.

Although millions of people have funeral cover, they don’t always have the right cover suited to their needs. We spoke to Prudence Thipe, Old Mutual's General Manager, about choosing funeral cover.

What are some of the common mistakes people make when taking out funeral cover?
“Customers often look only at the cost of the funeral cover, but various factors need to be considered before deciding which cover best suits your needs,” says Prudence.

She says the way to know which cover is best for you is to look at the overall benefits and reliability of the service provider. Prudence adds that it’s also advisable to look at the benefits that each funeral cover plan has.

Some of the benefits can include groceries, education benefits, terminal illness benefits, retirement paid-up benefits etc. So not only will the policyholder get paid out for the funeral expenses, but they can enjoy added benefits.

What are some of the things that contribute to a higher funeral cover price?
“There are various factors that could impact the price of funeral cover, including the age of the policyholder and the number and age of beneficiaries. Features and benefits such as Cash Back, Double Accidental Cover, Education and/or Grocery benefit also impact the price of funeral insurance premiums, however, they are important to consider as they safeguard our finances at a time when we need it most,” says Prudence.

What is the process of claiming and how long does it usually take?
Prudence says the first step is to report the death of your loved one at Home Affairs offices. The department will issue a Death Report after the death is registered. Once Home Affairs has received the relevant forms, they will issue a Death Certificate, which you need to send to your insurer to activate the funeral cover.

“Once informed, your insurer will provide the necessary documentation that you need to fill in, such as the Claims Form and Beneficiary Form. The beneficiary will be required to complete the following documentation when making a claim: Certified copy of death certificate, copies of ID or passport of the deceased as well as the beneficiary or a copy of the birth certificate if younger than 18, proof of banking details of the beneficiary or estate,” says Prudence.

When it comes to the payout period, Prudence says it depends on the service provider, product and the circumstances surrounding the death.

“Most service providers will pay out within 48 hours of the submission of all the correct documentation,” she adds.

What are some of the things that can cause failure of payout when claiming?
“Incorrect information provided during the application stage could result in the claim being disqualified. If the policy lapsed due to non-payment of premiums, no payout is possible,” she says.

Does the cover amount increase annually as the premium increases?
"Funeral insurance is subject to annual monthly premium and cover increases. This ensures that a customer’s level of cover is maintained, despite inflation and the rising costs of a funeral," says Prudence.

Is there a way to review and get the premium reduced annually?
Prudence says policyholders can do a cover review.

"The reason for the review is that during the five years, there could have been circumstances that had an effect on the cost of providing cover. This could be changes in law, claims experience or economic conditions. You will be notified in writing of any changes to your cover."

Funeral cover, life cover, burial society - Is there a difference and which one is advisable?
“Each of these options has a different purpose and is designed to meet different needs. Burial societies are a well-known informal financial mechanism in South Africa and play an important role in communities across the country. Life insurance pays a set amount of money when the insured person dies and is designed to take care of the deceased’s responsibilities at the time of their death. Funeral insurance provides money to pay for the burials of policyholders and their beneficiaries,” says Prudence.

Alternatively, what are some of the ways people can save for funeral costs if they don’t have a funeral cover?
“You could regularly deposit a specific amount in your bank/emergency saving account. Pay monthly fees to a credible funeral parlour in your community for selected service packages. Burial societies and/or certain types of stokvels can also help at a time when your family might need it the most,” concludes Prudence.

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