Do Old Funeral Policies Offer Smaller Benefits?
July 7, 2018
Old funeral policies don’t always deliver when you take out a funeral policy you have to know what you are buying.
For instance, you need to make sure that money set aside for a funeral plan will grow at the same speed that the cost of a funeral does.
There are many costs relating to funerals, and often people go into debt to afford them. Not many people get to the stage where they have old funeral policies as a result.
The increase in average funeral costs has been roughly 80% over the past few years, and will continue to rise. When did you last read your old funeral policies?
Old Funeral Policies lapse easily
Different plans will cover different costs and the most basic cover may not include all the things you want. It is therefore important to read the small print carefully before buying any funeral policy.
If you don’t read and understand your policy, there can be no guarantee that the money you’ve been paying over the years is keeping up with inflation to pay the cost of the funeral you have in mind.
Remember that even though you have been faithfully paying your funeral policy for years, if you skip just one premium your insurance company will cancel your old funeral policy. Yes, there are some insurers who will allow you to skip JUST ONE premium without affecting your cover. Check on cancellations and what cash value you’ll get if you also decide to opt out.
Make sure Your old Funeral Policies Live up to their Promises
You need to make sure that the cover you take out today will pay you out an adequate amount in the future when you pass away. Make certain that the funeral cover you get is through a reputable company. This way you ensure that an aging policy will pay out appropriately when you need it to.
You should review your funeral policy each year to make sure it is in line with inflation. This is measured against the change in Consumer Price Index (CPI) which ensures your funeral plan keeps up with inflation rises. Your premiums will be reviewed and will increase by the change in CPI.
Look at SA Financial Planners for instance. As a financial services company, they have what is known as the Automatic Inflation Management (AIM) Benefit, so there will be sufficient cover at the time of the funeral. They allow you to choose premium increases of 6% or 10% to provide you with cover increases.
Will the old funeral policies you took out years ago be able to cope with modern living standards? To ensure that your policy stands the test of time, make sure your policy documents have a policy number and a membership certificate so as to validate your policy in the first place.
There are many scams where people have bought funeral policies in good faith and discovered the documents were fake.
Paid-Up a Better Option?
It is important to research the different funeral policies to find out how they operate. Get a funeral cover quote by completing the form on this page. Don’t forget to submit it.
To contend with the rising cost of dying, more and more people are looking at pre-paid funeral plans. You can opt for paid-up which means when you reach retirement, the cover will reach maturity and be paid up.
The attractive part is that the policy holder will no longer pay premiums, but cover still continues. It goes without saying that this benefit comes at a higher premium but it is a worthwhile option if you can afford it.
To get a funeral cover quote please complete and send the form on this page
All info was correct at time of publishing