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What to look for in a funeral policy

Personal Finance

How do you choose a funeral plan that will suit your needs and not leave your family drowning in funeral expenses?

Felix Kagura, the head of long-term insurance propositions at Standard Bank, says that, on average, a funeral costs between R3 000 and R9 600.

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“The high cost of funerals often comes as a nasty shock. Many people say that it is sudden expenses like these that tip them into a spiral of debt that is hard to get out of,” Kagura says. “Calculated planning is the key to making sure that finances are available to cover the funeral costs.”

He says you need to know the terms and conditions of your policy, because this will keep your expectations in line with what you will receive when you claim.

Kagura says you should look carefully at the different funeral plans and select a policy that will best serve your financial needs.

He advises that you take note of the following three key points:

1. Ensure the funeral plan is from a financial services provider that is registered with the Financial Services Board;

2. Determine the exact benefits that the plan provides; and

3. Find out how long it will take for the plan to pay out after the death has been reported.

Kagura says that you need to obtain satisfactory answers to the following questions before you sign up for a funeral policy:

1. Who does the funeral plan cover? A handful of funeral plans offer full family protection. Ensuring that you choose a plan that covers close family members, such as your children, spouse and parents, can give you added peace of mind.

2. Does the plan have any additional benefits? Many plans offer a variety of additional “living benefits” besides burial and funeral considerations. These may include:

• Access to a network of doctors, optometrists and dentists;

• A certain amount of cellphone airtime at the time of the funeral; and

• Monthly grocery benefits for a period following the funeral.

3. Will the benefits increase over time? Some benefits increase each year in line with the premium increases, so that the amount for which you are covered keeps pace with inflation.

“Once you have done your research, you can purchase the funeral plan that suits your needs, both in terms of living benefits and post-funeral payouts. It’s also important that you understand your monthly financial commitments, so that your policy does not lapse, leaving you and your family in worse circumstances,” Kagura says.


FUNERAL EXPENSE CALCULATOR

Financial services company Metropolitan has an online calculator that estimates of how much a funeral could cost. 

I decided to fiddle around with this funeral calculator to see how much would be required from my family and me in case we had a bereavement in the family. The numbers generated by the calculator were, not surprisingly, on the high side.

According to this calculator, after I had taken into account everything that would ensure a “decent farewell” according to my custom, my family and I would have to dish out R59 050. This includes R8 000 for pre-funeral arrangements, R40 250 for the funeral itself and R10 000 for post-funeral expenses. 

This might sound like a lot to pay for a loved one’s send-off. However, this is a daily reality faced by many South Africans. 

Earlier this year, the media reported that a Johannesburg church had demanded R89 000 simply to host the memorial service for actor Joe Mafela. 

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