Most people in South Africa choose funeral plans over life insurance because they mistakenly believe that life insurance is just an inflated type of funeral plan. However, this is not the case – funeral insurance only covers the cost of a funeral, whereas life insurance provides funding for other expenses further down the line.
Below we explain why taking out an insurance product that includes both a funeral payout and a life cover benefit is a really good idea.
1. Paying for a funeral
Many people don’t know that having funeral insurance is not the only way of paying for a funeral. If you take out life insurance, your family will be paid R20 000 within 48 hours, subject to the receipt of all documentation, to help cover the costs of arranging your funeral. In some cases, this is a larger amount than you would have been paid if you’d only taken out a funeral plan.
2. Ensuring your family’s financial security
If you pass away, funeral insurance may cover the cost of arranging your funeral, but what about the months that follow after that when your family is left with no breadwinner? Life insurance will pay out funds that can be used by your family to spend on items such as groceries or other bills so that the financial effects felt by your absence are decreased.
3. Covering your short-term debts
If you die with debts to your name such as credit card bills or amounts owing on your store cards, your family will still be liable to pay these. Having a life insurance policy means that paying off most or all of your debts becomes possible, which will remove the financial pressure placed on your loved ones.
4. Creating an education fund
Money paid out from your life insurance policy could be used to create an education fund for your children, leaving a lasting legacy that will be felt for generations to come.
5. Meeting your home loan obligations
If you own a home and pass away, the responsibility to pay your monthly mortgage will be passed over to your family members, and they may not be able to meet those financial obligations. Having life insurance will allow your family to cover your home loan payments and keep a roof over their heads while they deal with the shock of your death.
By now, you should understand why having life insurance is as important as taking out a funeral plan. Get a life insurance quote now and ensure that your life - as well as your death - is adequately covered. Or, if you already have a funeral plan, add a form of life insurance to it today.
The Hollard Insurance Company. Ltd (Reg No 1952/003004/06) is an authorised Financial Services Provider.
