The facts around funeral cover

by | May 31, 2021 | Personal Finance

Funeral insurance is the most popular financial product in SA. In a time wherein money is tight and even the smallest monthly premiums make a difference it is important to know what you are paying for, if it is what you and your family need – and to ensure that the claim will be paid out accordingly , should anything happen to you.

How do funeral policies work?

As the policyholder, you will pay a monthly amount (known as a premium) so that in the event of death, a specified amount (known as your cover)  is paid out to your family. The lump sum helps pay for funeral costs, so that  loved ones do not have to deal with the burden of funeral cost in this difficult time.

The Ombudsman for Long –term Insurance has  posted  general guidelines to follow when buying funeral cover

  • If you are buying a funeral policy from a salesperson always make sure that the person has a licence from the Financial Services Board (“FSB”) to sell insurance. Ask the person to show you their licence.
  • Make sure that you know who the insurer is. Funeral policies are often administered and sold by third party funeral administrators. It is important to know who the insurer is who underwrites the risk.
  • If there is an application form, fill it in yourself. Make sure you read everything on the form including the fine print above your signature.
  • If there are any questions or declarations about your own or any other life assured’s health, make sure that you disclose all the important information. When you claim and the insurer finds out that you did not disclose material information on the form it could cancel the policy and not pay the claim.
  • You must be sent a policy or a policy summary when your application is accepted. Insist on seeing the document. Read it and make sure you understand it. If not, phone and find out what it means.
  • You have a 30 day “cooling-off” period after you receive the policy or summary to cancel the policy if you are not satisfied.
  • Make sure that your premiums are paid every month on time. It is your responsibility, even if you are paying by debit order or stop order. Keep proof of payment. If the premium is not paid the policy may be terminated and a claim may be refused. There is a grace period (15 days or longer depending on the policy) after the due date when cover continues, but after that no benefits will be paid.
  • If you have any dealings with a salesperson, the administrator or the insurer, keep written proof of the dealings.
  • Make sure that any beneficiary nominations (where you nominate the name of the person who must receive the benefits on your death) are up to date and still reflect your wishes.
  • When a life assured (the person covered by the policy) dies, the claimant must submit the claim as soon as possible. Check in the policy how much time there is for a claim. If the claim is late the insurer can refuse to pay the claim.
  • If a claim is refused for any reason the insurer or administrator must give you the reasons in writing.
  • The Ombudsman for Long-term Insurance resolves disputes between subscribing insurers and policyholders.


Now, is as good a time as any give your finances a thorough once-over.

  • Carefully look at all your insurance premiums and make sure that you aren’t duplicating cover
  • If you can take one or two premiums and put it towards paying off your debt, it will stand you in good stead
  • If you are struggling to keep up the payments on all of your debt, insurances and everyday living expenses – contact NDA today.

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