Dying is not something most people want to think about but there is no way around it; unless someone invents a cure for death and that won’t be happening anytime soon. Dying of old age is one thing but dying when you are still young needs some extra attention especially if you have a family depending on you.
Many people think that if they have money saved and own other assets that can be sold, this will be sufficient to help their family pay for the funeral and other expenses. The reality is, that when you die your assets are “frozen” until your estate is wound up. This means that your family will not have access to your money or possessions right away. It could take 3 to 6 months to get the legal issues out of the way. In the meantime, your family will have to foot the bill for the funeral.
Dying is a costly event, even a budget funeral can cost R10,000; this is a big amount of cash for your family to come up with at short notice. The last thing you want is for them to go into debt on your account.
The solution is to invest in a funeral policy, this policy is a way to make sure that your family has access to cash within 48 hours of your death. Even if you have a life insurance policy it can take up to 6 weeks to get paid out because the insurance company needs a lot of documentation before they release the funds.
A funeral plan can cost as little as a few burgers and cokes or a Pizza each month, and it will pay up to R50,000 towards your funeral. The cost of a funeral will be determined by how extravagant you want it to be, or rather, how your family decides to handle the event. Common sense tells us that caskets with solid gold handles and hiring the Philharmonic Orchestra to perform at a funeral is not the best use of funds. You should encourage family members to keep costs as low as possible, if you are the breadwinner they will need money to maintain their standard of living while they adjust.
All of these conversations need to take place now, so your family will know what to do. You need to draw up a will and make sure that your family knows where it is and where the funeral policy document is kept. While you can mention the funeral policy in your will, you must ensure that the person you nominate to receive the funds in your will is the same person who is named in the policy. If you name two different people, the person named in the policy will receive the funds.
If you are unsure about how the policy works, ask a consultant, even if you feel the question is silly. You should only buy a Funeral Policy from a reputable company as there are some unscrupulous persons claiming to represent the funeral policy business. Read the fine print so that you know exactly what you’re getting for your money. Once the policy has been issued, you will get a summary of the conditions and requirements relating to the policy. Take the time to read through it so you fully understand the terms and conditions.
