There are two expensive trips each of us will make…both of them involve Churches.
This article deals with the final trip each of us must make – our funeral.
But what if it happens unexpectedly?
Death is no laughing matter, and I apologise if it comes across as such in this article, but to be honest the only time most of us even think about the topic is when we’re at one. A close friend passed on recently – not in a comfortable hospital bed surrounded by family and friends, but in a crowded shopping centre. What I found shocking was that the ambulance staff weren’t willing to assist with removing him. This got me thinking about what would happen if I passed away. My question to you is: “What would you do if this happened to you?”
Imagine meeting your end in hospital and…
Your nearest and dearest begin bartering with the hospital… “Is it possible you could keep him here for a month or two while we arrange money for the funeral?”
From my experience, there’s not much empathy to be received from hospital authorities, never mind sympathy. How would I know? Recently I took a man to hospital, and while he lay groaning in pain (He suffered a broken leg), the nurse was more interested in getting his ID number, than stopping his bleeding.
Anyways, let’s assume you’re now at the funeral parlour and your family tries negotiating. “Please, we beg you, could we pay this off over 6 months?”
Can you see the guy choking on his coffee?
Let’s face it; those left behind are going to have come up with money…and fast! If you don’t have the money – or can’t come up with it fast – then affordable, no hassle funeral cover isn’t optional.
What options are out there?
Some insurance companies offer both life insurance and funeral cover.
Life insurance is aimed at settling all your debts and replacing your income in the event of death. Think of all the day to day expenses which won’t go away even after they’ve tossed the last shovel full of earth. Life goes on.
Funeral cover, on the other hand, is there to pay for the funeral – whether yours or one of your family members. Some of the expenses which can be paid are:
- Groceries if the main member passes away (One company offers R6, 000 made up of a R1, 000 a month for 6 months)
- The Memorial benefit (R5, 000 towards a tombstone on the anniversary of the burial for anyone older than 14 years of age), and
- Repatriation from anywhere in South Africa including the cost of having one family member accompany the deceased. We tend to gloss over the cost of repatriation, but imagine the cost of flying you back from Cape Town?
Then there’s the fact you can add your wife, up to 5 kids, and 10 extended family members on your policy. Your life insurance policy isn’t going to allow you to do all of this (unless they allow you to add a funeral benefit on top of the life cover).
Another thing about funeral cover is that it pays out within 24 hours of having received all the documentation. With life insurance, depending on the circumstances of death, the payout could take a week or more…or never (if the circumstances around the death are shady).
Not cool to be left chilling while they dispute your life insurance payment.
So how much funeral cover can you buy?
One popular company offers anywhere between R5, 000 per person and R100, 000 per person depending on their age. They won’t allow someone to take out R100, 000 funeral cover on their five year old, for instance. Not because they don’t want to; rather it’s because the law prohibits it. There are some strange people out there who will do anything for a R100, 000.
A cool feature is the fact that if the main members passes away, everyone else on the policy will remain covered for an additional 24 months absolutely free.
What if I die a day after the first debit order runs?
There is a waiting period of 6 months for death by natural causes which is fair. Natural causes are things like old age and heart attack, that sort of thing. Accidental death claims are paid immediately except for suicide which has a 24 month waiting period.
Does everyone on my plan pay the same?
Nope. It all depends on age and the number of people included on your funeral plan.
- You, as the main member, and your spouse must be between the ages of 18 and 65 when joining for the first time.
- Your children are covered until 21 unless they happen to be studying, in which case up to 25. But you have to let the insurance company know if they’re going to be studying since they automatically fall off once they turn 21.
- Parents 75 years old and younger may be added, while
- Other family members, not older than 65 may also be added.
So how does the age thing work?
- The main member and spouse may buy anywhere between R5, 000 and R100, 000 funeral cover
- Children 5 years old and younger – between R1, 250 and R10, 000 cover
- Children between 6 and 13 – between R2, 250 and R15, 000 cover
- Children from 14 to 21 (or 25) – anywhere between R5, 000 and R45, 000 cover
- Parents and extended family – between R5, 000 to R45, 000 cover
Will you be taxed on the benefit?
Thank goodness, no!
Must I use the money for a funeral?
Not at all! You can use the money to even settle unpaid medical bills if need be. Remember that they are paying the money to your beneficiary – not to the funeral parlour.
One insurance company we looked at also offers:
- Debt counselling over the phone
- Drafting of a basic will which can include a Testamentary Trust for your children
- Legal advice and mediation if you need help winding up an estate of one of your relatives
- A digital financial education course offered through Boston City Campus nationwide
All at no charge to policyholders!
What more can we say? Even if you don’t have life insurance in place – the least you can do for your loved ones is take out funeral cover. Take it out wherever you want, but just take it out…you just never know when you’ll need it.
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