Make sure funeral policies don’t haunt you

Many South Africans have taken out funeral policies for themselves, or for someone else such as a family member. While these policies are very useful there are a few things to watch out for to ensure that there are no complications when it is time to claim.

FNB advises that people should avoid taking multiple policies, should never default on a policy payment, look at every possible option before allowing a policy to lapse and check the ???special clauses’.

“Funeral policies are common in South Africa, and are a way of ensuring that costs that accompany a death are covered,” says Eunice Sibiya, Head of Consumer Education at FNB. “They are especially important in a culture where the funeral can end up being expensive.”

Taking up a policy is very easy, you need to be a South African citizen, be between the ages of 18 and 64 and have a valid bank account. All insurers are governed by the same legislation but it is always good to go with a brand you know and trust.

But there are a few things to consider when planning on taking out a policy, or reviewing the ones you have.

Do your homework

There are many different types of policies out there for different amounts, these can cover either a single family member, or you can take out policies for your entire family. They also range from small pay out up to thousands of Rands.

“Review what your needs are and know what you can afford now as well as what you or your family’s needs will be once there is a death,” says Sibiya. “If you are insuring someone else, for instance a family member, make sure that you can afford the premiums so your policy doesn’t lapse midway and you find yourself with no financial assistance when you need it most.”

“Very often consumers don’t do the necessary homework when it comes to funeral policies and may end up with multiple funeral policies for themselves or for a family member just to make sure they are covered.

“This becomes cumbersome to handle, however having a single policy is much more manageable. So, rather review all the different policies that you have and consolidate your needs into one plan with all your loved ones included,” says Sibiya.

Read the fine print

Death is an emotional topic so look out particularly for exclusion periods that may apply at claim stage, that is anything that may exclude a claim from being paid out – such as if there is a waiting period which means you need to allow for a certain amount of time before a claim can be processed.

Don’t let your policy lapse

“One of the most important considerations when it comes to funeral policies, or any policies for that matter, is that if you get into financial difficulties, don’t just stop paying,” says Sibiya. “Let your bank or financial service provider know and they can help structure a solution like a possible downgrade that may be more affordable. If you simply don’t pay, your plan will be cancelled after two lapsed payments. Should you want to re-instate the cover at a later stage, all the policy exclusion periods may be re-enforced.”

Let someone know

Make sure that you let someone know if you have a funeral policy.

“Consumers sometimes file the policy documents away and forget about them, however, if you die your family won’t know that you have a funeral policy and all those monthly premiums will be wasted,” says Sibiya.

Make sure that you at least inform or give a close family member a copy of your policy and all the details so that in the event of your death, they can claim.