Choosing the right funeral cover amount

Many consumers who take out funeral cover often struggle to choose the appropriate cover amount for funeral expenses.

Nthabiseng Sethabela-Makoeng, Product Manager at FNB Life says, when deciding on the correct cover amount, it is essential to abide by the most basic principle of funeral insurance, which is to ensure that family members or beneficiaries have the financial means to provide the deceased with a dignified send off in the unfortunate event of death.

“Because every family is unique, the concept of a dignified funeral often differs as consumers have individual preferences and standards they adhere to. Therefore, the stipulated funeral cover amount should meet the expectations of the family without additional funds having to be raised,” says Sethabela-Makoeng.

She points out three factors that consumers should consider when choosing the correct funeral cover amount:

  • Premium prices – in some instances, consumers only consider the monthly premium that they will pay at the end of the month.

“Although paying a lower premium may save you money in the interim, the corresponding cover amount may not be adequate. When a death in the family occurs, it may set back beneficiaries financially as they would have to provide for the shortfall from their own pockets,” cautions Sethabela-Makoeng.

  • Taking inflation into account – when taking out cover it is essential to take a long-term view which considers the impact of inflation.

As a starting point, consider taking a five-year view and adjusting the cover amount accordingly. This is more practical than reviewing and adjusting your cover amount on a yearly basis.

  • Post funeral expenses – many consumers overlook the importance of catering for post event funeral expenses like a tombstone. For some families, the cost of an unveiling ceremony event can be as expensive as the funeral.

As a result, consumers who don’t consider post funeral expenses when choosing the cover amount may find themselves having to borrow money to cover additional costs.

“Although death is not a common dinner table discussion, it is essential for policy holders to discuss the funeral cover amount with their family members or beneficiaries to determine what constitutes a dignified funeral and the cost thereof. This will help to ensure that the correct funeral cover amount has been selected,” concludes Sethabela-Makoeng.

 



Latest


21 Sep 2020
Women are lagging in retirement savings and are debilitated by stress

In a recent study of their client base, Momentum Corporate revealed that almost half (41%) of the employees on the…

Women are lagging in retirement savings and are debilitated by stress

In a recent study of their client base, Momentum Corporate revealed that almost half (41%) of the employees on the FundsAtWork Umbrella Funds are women. With an almost 50/50 gender split across the client base, a one-size-fits-all approach to advice on employee benefits simply won’t cut it. This is according…

15 Sep 2020
Despite COVID-19, SA investors expect higher future returns

Even as COVID-19 halted the longest economic expansion on record and plunged the world into deep recession, South African investors…

Despite COVID-19, SA investors expect higher future returns

Even as COVID-19 halted the longest economic expansion on record and plunged the world into deep recession, South African investors expect to make an average annual total return of 12.67% – almost 2% higher than the global average predicted returns of 10.9%. This was revealed in the recently released Schroders’…

15 Sep 2020
Are cryptocurrencies here to stay?

The recent news that cryptocurrency giant, Digital Currency Group, has acquired cryptocurrency exchange company, Luno, has once again highlighted the…

Are cryptocurrencies here to stay?

The recent news that cryptocurrency giant, Digital Currency Group, has acquired cryptocurrency exchange company, Luno, has once again highlighted the rise of cryptocurrencies as a possible alternative to the current global financial system. According to Old Mutual Investment Group Director of Investments, Hywel George, Bitcoin, as well as a number…

10 Sep 2020
How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key…

How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key that dubbed America “The land of the free”, which stuck, to the unforgettable Mel Gibson monologue where an army of painted Scots were willing to trade their lives for the…


Top stories


10 Apr 2020
When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved…

When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved to be most enterprising in acclimatising to challenges as they arise.

13 Apr 2020
Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19…

Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19 environment and what form a global market recovery will take.

13 Apr 2020
SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The…

SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The draft Bill, together with its explanatory memorandum, provides clarity with regards the tax relief measures President Cyril Ramaphosa announced on 23 March.

11 Apr 2020
Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the…

Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the global economy is facing an unprecedented situation of balancing health against financial livelihoods.


Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za