Insurance Against Funeral Cost in South Africa
September 2, 2016
In South Africa, historically the informal funeral service providers, stokvels and burial societies have served the low-income market. But now there are more formal insurers. So people are wondering which is the better kind of cover. With the alarmingly high cost of funerals, even the poorest people are turning their backs on their other debt. They are opting to use every last cent for burial insurance.
Insurance Against Funeral Cost – Financial and Practical Support
Burial societies are where people contribute an amount each month and then claim funeral costs when a family member dies. This kind of informal insurance helps family members with the expenses of the funeral. They also provide practical support for the household throughout the preparations. These burial societies are for those with low incomes.
For many years these burial societies have been playing a role in making sure that poor people don’t have to resort to pauper funerals. Millions upon millions of individuals belong to these burial societies. But many of the wealthier and more educated are moving away from them and opting to buy funeral cover elsewhere.
There are many South Africans who take out several funeral policies for themselves, in spite of being warned not to take out multiple policies. Unfortunately, there can be negative repercussions.
Insurance Against Funeral Cost – Burial Societies not the Only Choice
African funerals are still massive, expensive events. A spokesperson for the International Network of Financial Services Ombud Scheme says that banks and insurance companies are competing over funeral policies. And the same consumers who diligently contributed to burial societies, are changing their loyalties. They are looking at other forms of burial insurance over funeral societies.
Funerals cost in the region of 8, 9 or R10 000 these days. So despite the funeral plan’s mission to meet the cost of the funeral, the cost of the insurance itself is prohibitive.
For many Black people on a low income, it remains crucial for them to have funeral insurance no matter how little they earn. Not just funeral cover for themselves, but for their entire family. That’s why financial products are more affordable to low-income people; funeral insurance starts at R25 a month.
You’ll find this cheap funeral cover sold everywhere in South Africa. You can get it from retailers like Pep and Edgars to banks like ABSA and Capitec among others.
Insurance Against Funeral Cost – The Little you Have is Taken
People exploit the poor by collecting premiums by direct debit. Many unscrupulous insurers have jumped in and benefited from the weak and ignorant. The SA Financial Services Board is always available to name a host of companies who are under investigation for these fraudulent practices.
Funeral insurance is a serious consideration for people where the death rate is high. In the black culture, a small funeral means you don’t have money. Many Blacks who don’t have money want to prove their peers wrong, and they go into massive debt. They a huge elaborate funeral over several days.
Insurance Against Funeral Cost – Give Funerals a Re-Think
The trend is now to buy the more expensive funeral policies that will cover these lavish feasts even if you can barely afford it. And funeral plans include you, your partner, every child you have as well as extended family. The whole funeral idea is out of kilter with reality.
While it is true that funeral cover is one of the most affordable there is, having many children when you are unemployed is a recipe for disaster.
There are limited natural and economic resources, and with so many unemployed family members, the humble loaf of bread might well be all you get at funeral feasts of the future.
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All info was correct at time of publishing