Go to ‘Mashonisas’ to cover funeral expenses at your own peril

2016-04-07 06:00

Most working South Africans have to financially support their parents, siblings and extended family. Sometimes this financial responsibility goes beyond regular expenses like groceries or electricity bills, to major costs such as paying for a funeral in the event of losing a family member.

CEO of FNB Life, Lee Bromfield says people who do not plan for the loss of a loved one usually have to take up debt of tens of thousands for burial expenses. He says the desperation to get money for a funeral can lead to poor judgement and exploitation.

“When people do not qualify for a loan with reputable credit providers such as banks, they are likely to go to ‘Mashonisas’, also known as ‘loan sharks’. Such individuals find themselves at the mercy of illegal practices like having their IDs or bank cards withheld until they settle the loan. The reality is that all these risks can be avoided if people plan properly.”

Bromfield says the easiest and most effective solution is to take up funeral cover to protect yourself, your immediate and extended family. “Even though taking up cover may not seem like an urgent need now, the risks of not owning any cover are far bigger,” he adds.

He says people who are considering taking up funeral cover should do the following:

Work out your needs

• The number of people you would like to cover will give you an immediate sense of the type of cover you need. Remember to include those that may be from extended family but rely on you financially.

Know how much you can afford to pay

• Funeral plans are relatively cheap compared to other forms of insurance, but you still need to have the budget to pay your monthly premium. Despite this, you should not base your ultimate decision only on cost, consider value as well.

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