'South Africans pay too much for funeral cover'

By Janice Roberts
Editor

Peter Castleden, CEO of digital insurer Indie believes that South Africans deserve better than what the funeral insurance industry is currently offering. “Funeral cover has been a one-size-all product that appears cheap on the surface, but can be incredibly expensive in relation to other cover,” says Castleden.

“When selling funeral policies with an average premium of between R100 – R150, using old technology and sales techniques; insurers typically can’t put in the required effort to enable clients to go through full underwriting” says Castleden.

In addition, people add other relatives to be covered by their funeral policies, and often don’t have all the medical information required to give the policy provider an accurate idea of the risk they are taking on with each person they add. Castleden says that for this reason, the policies are very expensive.

“With any insurance, if there is no underwriting, there are always plenty of people who try to take advantage of the system. For example, someone might insure an uncle that was given 8-months to live, knowing that he just needs to make it through the 6 month waiting period to cover his funeral when he does pass”. Castleden says while it might be rational behaviour – it means insurance companies see this in their claims experience, and start to build it into the price and increase the price significantly to cater for it. 

Castleden says that the only way to overturn the current situation is to make fully underwritten cover accessible and convenient – which is easy if you’re a 100% digital insurer with the technology to complete the underwriting process within 10 minutes, online. “No one has tried it before now, but we’ve made it so easy on our life products, that we can offer these to a segment of the market that has largely been ignored in terms of life cover.”

All of Indie’s products come with a built-in investment product that builds long term wealth for Indie’s customers, but a unique feature of Indie Finale Life cover is a quick payout (up to R50 000), which is issued promptly at the time of claiming, so that money is there for immediate expenses. “Individuals who qualify can get up to 15 times the cover for the same premium on a funeral policy,” says Castleden.

“It’s time people get a better deal – especially for situations when they’re at their most vulnerable.”

Tagged under:

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