So what is a funeral plan compared to life cover? You pay a monthly premium for life insurance. It’s like taking out car or home insurance. With life insurance, you can be sure that you have enough money for your family to maintain their lifestyle if you die.
But what about a funeral policy? It’s certainly cheap – you pay between R25 and R90 for a whole host of benefits. It is one of the most affordable insurance solutions available today.
With life insurance on the other hand, not only does it cover you for death but if you become physically challenged and can no longer work, but there will be money to support you for the rest of your life.
Insurance companies pay out for both life and a funeral cover on the death of the insured. For both you must pay premiums on the agreed terms, failing which the insurance company cancels the entire policy.
Funeral Plan Compared to Life Cover
Let’s just look at what each of these covers is and how they work:
Funeral Plan Compared to Life – Funeral Cover
- Provides money for the short-term.
- Today’s modern funeral plans pay out a lump sum at the time of death.
- With funeral cover, you get other benefits which enhance the funeral cover. These can be things such as groceries for during the funeral preparations and for some months after the funeral. You may also get airtime vouchers so you can communicate with family members etc.
- Funeral cover is essential if you want to make sure that your family can provide you with a dignified funeral.
- One huge draw-card for people looking for some form of cover is that funeral insurance means you don’t need to undergo a medical examination. Insurance companies virtually never reject an application for funeral cover.
Funeral Plan Compared to Life Cover – Life Cover
- Unlike funeral cover, which is a once-off payment of funds, life cover provides resources for an extended period. But the insurance company can also pay out a one-off lump sum.
- Life cover also ensures that there is enough money for your family to enjoy the type of lifestyle they’ve always had, even when you are no longer there. When you calculate how much life cover you’ll need, you have to think about the home mortgage, your credit card and other debt, your children’s education costs, car insurance, medical aid and your day-to-day living expenses.
- You will in all likelihood need a medical examination, which is bad news for people with ongoing health issues. Seniors stand little chance.
The question arises – ‘should one opt for life- or funeral insurance’? Many life insurance policies have a funeral component. Some circumstances and aspects account for this. Certainly, your finances will play a significant role in helping with making an informed decision. Do your research and look at the pros and cons of both.
Ideally, you’d want both, because, with life cover, the benefit payout can take far longer than the funeral cover, which is paid out within 48 hours, which means the funeral for the deceased, and all its financial implications may well be long over before you receive the much-needed money.
Funeral Plan Compared to Life Cover – Avoid being Uninformed at All Costs
What suits you best – funeral- or life insurance? Knowing that money is available can help you get over a death that much quicker. Check out MayaonMoney – an excellent website with lots of useful articles written by a financial expert and journalist. She writes on how to choose insurance plans the right way and how to manage your money far more efficiently. You can avoid debt and endless sorrow because you have met all your financial obligations.
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