Life Insurance versus Funeral Cover
Both life insurance and funeral insurance offer value for people looking for financial security in the future.
Life and funeral insurance are two different products, offering different benefits. If your life insurance policy has a death benefit of R3 000 000, then your beneficiaries will receive this payout when you die.
They can use the money as they wish.
Most funeral plans cover you as well as your extended family for amounts less than R100 000.
Life Insurance v Funeral Cover
- Funeral insurance is designed to take care of your funeral expenses. This insurance is used to cover the costs associated with the funeral. You won’t get a lump sum like you would with life insurance to spend as you like.
- Life insurance has options – you can choose a permanent life insurance policy or a term one. Whole life is a lifetime plan while a term plan is for a certain amount of time. With a term policy, you could live beyond the time and exceed the benefits. Burial insurance doesn’t expire. It pays out when you die.
- With some kinds of life insurance, you can accumulate cash value. You can cash it out when you need it. With a burial insurance policy, there isn’t a money value that increases. If you’re in urgent need of the money, you can’t borrow against it, and you can’t cash out. With funeral insurance, you either pay an amount all at once or you pay premiums. When you die, the insurance takes care of your funeral expenses.
- What is nice with modern funeral insurance, is that funeral homes include useful benefits into each plan. You can enjoy airtime, grocery and transport benefits which are separate from the actual cover of the policy.
- Funeral insurance can start with a monthly premium starting from as little as R25 a month. Life insurance cover usually costs a lot more – roughly R200, R300 or 400 a month. Cover discontinues the moment you miss a payment.
- The main idea behind life insurance is to ensure that to take care of all your expenses when you die, to pay for a funeral and to also allow your remaining family members to continue with their usual lifestyle. A funeral policy covers your funeral. There isn’t money to pay for the likes of outstanding debt.
- Life insurance offers the advantage of benefits to enjoy in your living years. It wasn’t always like that, but these days, so do funeral policies. More recently funeral homes are starting to include benefits that can be put to use while the policyholder is still alive.
- A funeral policy pays out within 48 hours so you can plan for a funeral while it can take anything between 3 days to 3 years to pay out with a life cover policy.
Allow Your Good Fortune to Dictate
Have you ignored funeral cover because you already have a life cover policy? Money is a necessary evil – an indispensable part of every aspect of our lives. It is important to safeguard your family against costs that concern you. The type of cover you choose depends on your unique situation. Check out both, do research on which would be your best bet – you may be able to be one of the lucky ones who can take both.
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