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Funeral Cover will provide financial peace of mind for you and your family.
Funeral Insurance
One way to shield your loved ones from the cost of your funeral is through funeral insurance.
To honor your memory with a funeral service or to take care of your financial affairs, such as paying off credit card debt or other bills, your loved ones are free to use the payout from your funeral insurance for any final expenses.
South Africans consider insurance when they want to financially protect themselves and their families. But what occurs if you require insurance to pay for a funeral?
Seniors’ funeral insurance is growing in popularity, and for good reason. Here, we’ll go over what funeral insurance is, why having it is a good idea, and how to get it.
What is Funeral Insurance?
Funeral insurance is a type of permanent life insurance product. A traditional permanent life insurance policy provides income replacement if you pass away. By contrast, a funeral insurance policy is intended to cover specifically your end-of-life expenses.
Funeral insurance has smaller payouts than most permanent life insurance policies. As a result, it is less expensive.
Funeral insurance doesn’t have an end date and lasts as long as you do, provided you pay the premiums. It is often called burial insurance, final expense insurance, or end-of-life insurance.
Funerals can cost upwards of several thousand dollars, so it’s important to plan ahead. Otherwise, your loved ones might be stuck paying end-of-life expenses, like burial services.
Many elderly don’t buy funeral insurance because they think they won’t qualify due to poor health. However, these policies are much easier to get compared to traditional life insurance since a medical exam is not involved. You can qualify for coverage even if you have a serious illness, although there may be a waiting period on the policy.
Keys Takeaways
- Funeral insurance is a type of permanent life insurance that is intended to cover your end-of-life expenses.
- Funeral insurance has smaller payouts than most permanent life insurance policies, but is also less expensive.
- You can qualify for coverage even if you have a serious illness, although there may be a waiting period on the policy.
Types of Funeral Insurance
There are two types of funeral insurance policies. Both help you cover your final expenses, though they vary in pricing and eligibility requirements.
Simplified Issue Life Insurance
Simplified issue life insurance can be a good option for those who can’t get traditional insurance coverage but are only at moderate health risk. You won’t have to take a medical exam to prove eligibility. However, you will have to provide some basic information about your health.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance, as its name suggests, is a policy whose acceptance is ensured. As long as you are younger than a certain age, you cannot be rejected. SOUTH Africans are not required to submit to a paramedical examination or reveal any personal health data.
For a person with a serious medical condition, guaranteed issue life insurance is the best option. Although the premiums are higher, the payout is typically less than with simplified issue life insurance.
Funeral Insurance vs. Life Insurance
Both of these pay a death benefit — but they are used for entirely different purposes.
Life insurance is typically intended to pay for costs that would be a financial burden to your family, but find difficult to cover without your income. This can include expenses like college tuition fees, a mortgage, or the cost of raising kids.
Funeral insurance typically covers funeral expenses, final expenses, including medical bills and cremation fees.
Funeral insurance also has a lower face value compared to most life insurance since it’s intended to pay only for end-of-life expenses.
In addition, most life insurance policies require a medical test, while funeral insurance doesn’t. In fact, you won’t even have to provide any health-related information if you apply for guaranteed life issue insurance.
Generally speaking, a funeral insurance plan is more expensive than an equivalent life insurance plan. However, as the following chart illustrates, the price disparity is not substantial.
How much funeral insurance coverage do you need?
The amount of your final expense insurance should be sufficient to pay for the type of funeral you desire. Plan your funeral or memorial service in advance to obtain the most accurate estimate possible. The following are some of the major variables that can affect how much final arrangements will cost:
- Professional services fee
- Caskets
- Embalming
- Funeral service
- Burial or cremation
- Urns or headstones
What is the cost of funeral insurance?
How much you will pay for funeral insurance depends on several factors. Your age, the policy type, and the coverage amount can all impact your premium rates. Like other life insurance products, a final expense policy costs increase as you grow older. Also, simplified issue life insurance is cheaper than guaranteed life.
Frequently Asked Questions (FAQs)
ANS : Funeral insurance provides your family with a lump-sum payout to help cover your funeral and other expenses when you pass away. It ensures your loved ones can honour your final wishes without the added financial or emotional stress during a difficult time.
ANS : Funeral insurance is an important consideration for those who want to financially protect their family from their funeral and other final expenses.
Funeral insurance provides guaranteed acceptance for any aged between 18 to 79.
ANS : The cost is based on your age and the level of cover when cover starts, and how much cover you choose to take out. The premium will change if you make changes to your Policy, such as increasing the Cover Amount, adding optional Benefits or other people to your Policy.