Not one of us can escape the fact that dying is inevitable. Of course, we don’t relish the thought, so we avoid thinking about it, but we need to.
Death is unpredictable and expensive, and if you have not made provision for your funeral, your family members could be left with a huge financial burden.
In the event of your passing, your bank accounts are frozen. If someone is depending on the funds in your account to live from month to month, or needs access to saved funds, they could be severely compromised.
If you are married in community of property, your spouse’s bank accounts may also be frozen.
This process leaves the family out of pocket right at the time they need funds to pay for a funeral. It is for this reason that a funeral policy is a vital element of good financial planning.
"A funeral policy will pay out the beneficiary within 48 hours after the death of an insured person, giving you or your family the much needed resources to pay for a funeral and all of the associated costs,"says Tetiwe Jawuna, Managing Director: Standard Bank Insurance Brokers.
"There are different options to choose from depending on your needs. Funeral policies are designed to cover your funeral expenses, however these have evolved over the years and some policies offer more than just the funeral benefit."
"Over and above the funeral benefit, some policies offer other benefits such as discounts at doctor’s rooms, emergency ambulance services, airtime benefits and many more.
Some also include a grocery benefit for free or at an additional charge to ensure continuity, especially upon the death of a breadwinner.
This is why it is so important to always carefully consider the benefits offered in relation to the price before buying these products."
With policies of this nature, it is always important to consider the necessary steps to ensure you and your family get value for your money:
Only take out a funeral plan with a reputable, registered provider to ensure your policy is valid and will be paid out timeously
The insurance industry is not exempt from fraud. You therefore need to be aware of unscrupulous companies, particularly where cover is provided on a group basis, and sales and administration is outsourced to a third party administrator.
Ensure that the seller of the policy is a registered Financial Services Provider and can provide you with their licence number.
Always ask for documentation to prove this. Ask to see proper papers that show which insurance company the policy will be placed with.
If your policy is not underwritten by a registered insurer, it is invalid even though you may be paying money towards it every month.
Read the fine print so you know exactly what you’re getting for your money
For instance, some policies might not cover suicide or accidental death. Make sure that you read and understand the terms of your policy.
This will ensure that those insured are paid out without difficulty and the money becomes available immediately in the event of your passing.
Keep your policy documents safe
Always keep the policy document with your will, and tell your family where it is. This will ensure easy access at the time of need.
A policy certificate must be issued and given to you with information about the person or persons who are covered, as well as the terms and conditions of the policy.
This must contain the following information:
- Details of covered persons
- Amount of cover
- Minimum premium
- Breakdown of costs
- Full terms and conditions of the policy with the following details:
- Details of the underwriter and their license number
- Details of the broker and their licence number (if dealing through a broker)
- Claim procedures and complaints procedure including details of the Office of the Ombudsman and other important information about the policy
- Beneficiary details: nominate and provide beneficiary details when taking out the policy. This will ensure that the claim is processed timeously and there are no unnecessary delays.
Ensure that you receive a receipt if you make cash payments
The receipt must contain the information of the insurance company that has underwritten your policy.
"Death is a stressful and painful event for a family," says Ms Jawuna. "There are decisions to be made and actions to be taken. Knowing that funeral expenses are covered means that there is one less thing to worry about.
While it is unpleasant to talk about your possible demise, it is important to make your wishes known to your family and vital that they are aware of the existence of your policy.
It is wise to seek the help of a reputable provider who will be able to assist you with a funeral policy, and take time to prepare a will."