South Africans are not very well informed when it comes to choosing funeral insurance policies. It’s common for people simply to buy a policy from one of a handful of recognised brands or to choose funeral cover based on whatever TV advert is currently trending.
That’s surprising, because funeral insurance is one of the most popular financial products in the country. But perhaps it’s precisely because funeral insurance is such a common, everyday product, and because most policies look pretty similar on the surface, that many people don’t really ‘look under the hood’ before choosing a policy.
Thinking about value
Now let’s suppose you want to get real value from your funeral insurance policy. You’d start by comparing price. That’s a good first step: why pay more when you can pay less?
At My Treasury, we always want to go further. After all, we’re all about investing your money more wisely, which means doing more with less.
So the real question isn’t simply ‘who offers the cheapest funeral insurance policy?’ It’s often more important to ask ‘which insurer offers the highest amount of cover relative to the cost of the premium?’
To take a simplified example, imagine Insurer A offers R10 000 worth of cover for R150 per month and Insurer B offers R15 000 worth of cover for R180 per month.
While it may be tempting to settle for the lower premium, in this scenario you would actually get 50% more cover by paying only 20% more for your premium each month.
And when it comes to funeral insurance payouts, this isn’t just an abstract question of getting more bang for your buck. After all, the whole point of funeral cover is to ensure that, when the time comes, there is enough money to pay for a dignified funeral and to protect loved ones left behind.
That’s why one of the most important questions to ask when choosing a policy is: how much are you getting out for the money you put in?
Finding a reliable partner
If the purpose of funeral insurance is to pay enough money to protect beneficiaries when it is needed, then it’s obvious that three further considerations are important.
First, how quickly will the insurer pay once a valid claim is made? After all, one doesn’t tend to have the luxury of carefully planning a funeral far in advance. Funerals are often unexpected and need to be dealt with immediately. Furthermore, the potential loss of a breadwinner can make organising a funeral even more traumatic and create huge financial distress for those left behind.
Therefore, if a funeral policy is to offer the protection it is designed for, it is imperative that the insurer has a reliable track record of paying claims quickly and efficiently. A cheap policy that doesn’t pay out when it’s needed doesn’t actually provide good value.
Second, it is important to determine how many people a policy lets you cover, and at what price. For some, a policy covering a spouse and one or two children will be sufficient. But if your responsibilities extend to a wider family network, you will require a policy that lets you cover more people at a competitive price.
Third, make sure to check that there is no expiry date built into the policy. A funeral policy may appear cheap, but if, for example, the policy expires when the policy holder turns 65, there’s a good chance the policy won’t pay out when you need it.
Get more for less
Legal&Tax have gained a reputation as an insurance company that provides real value. Legal&Tax offers a higher payout at a lower cost, pay valid claims quickly, and make it easy to extend funeral cover to parents and in-laws.
To help you manage your well being more wisely, Legal&Tax even offers their clients advice on legal and tax issue, helping you to make more informed decisions and invest your money more wisely. Their policies even include debt counselling, to help clients live a debt-free life, and free trauma counselling to help cope with a difficult time.
Get a funeral policy that offers real value and help you in the path to financial freedom. Request a free quote now. A consultant will be in touch to offer you a better-value deal.
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