Financial planning is essential if you want to protect your family for a time when you are not around and getting the right insurance cover is an important step.
Ester Ochse, product head, FNB Integrated Advice, said that life cover and funeral cover are important in their own right, but each plays a very different role in how it can benefit a family.
“In the unfortunate event of death, beneficiaries can access their funeral cover and receive pay-outs within 24 hours, while life insurance offers dependants long-term financial support,” Ochse said.
The death of a loved one is emotionally difficult and it can also add financial strain to the family and friends that are left behind.
According to Ochse, the average funeral in South Africa costs about R35 000 and therefore it is important to plan for it and to get the right cover.
People can take out a funeral plan to take care of the expenses associated with the funeral, such as a coffin, transport and catering for the funeral. Make sure that the funeral plan you choose caters to your family’s needs.
Hlengekile Jita, funeral product manager at FNB Insurance, said that life cover is the solution to taking care of your financial dependants in the event of your passing and is used to pay for any outstanding debt, children’s education and other living expenses.
“The cover amount in life cover is higher than what one can get with just funeral cover. It is a good idea to get financial advice to assess how much life cover one needs to ensure your family is well taken care of once you are gone,” Jita said.
The difference between life cover and funeral cover
According to Jita, one of the biggest differences between funeral cover and life cover is that life cover requires underwriting.
“Underwriting allows an insurer to assess your risk profile and may comprise of a few questions or even medical tests for higher cover amounts. This information then allows the insurer to determine whether they can provide cover to you and provide you with the best price for the cover you need,” Jita said.
Thembisa Mapukata, general manager: tied distribution at Old Mutual Mass and Foundation Cluster, said: “Having an insurance plan in place that fits your budget, for both the funeral and life insurance, could be the best investment you ever make.”
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