Taking out funeral policies for parents is a common practice in families, but people often make a number of mistakes when choosing a funeral cover for parents in South Africa. In some cases, these mistakes can lead to payout delays and in some extreme cases, claims can even be declined. One of the mistakes people make is to treat signing up for funeral policies for parents as a “box-ticking” exercise. This is very risky as people overlook important factors that are critical to their claims being paid out.
There are some considerations to keep in mind when taking up funeral policies for parents, because the process is slightly different to that of a younger person. The process was made to ensure that the provider performs a proper and fair risk assessment, and the customer is expected to give accurate information.
Many people wait till their parents are ready to retire before they take out any funeral cover, hoping that this will save them money. This is very risky, as it will cost you more money as the funeral insurer has to consider a number of risk factors in your premiums, and that includes your age. If you can afford these more expensive premiums there will be no reason to delay taking up a funeral plan for your parents.
If you are taking up a funeral insurance when your parents are close to retirement, a funeral policy provider might include a waiting period. This varies depending on a number of things, but it’s important to be aware of these implications. Should the waiting period be 6 months for example and one of your parents passes away during that 6 months, no money will be paid out to cover the funeral.
Over the years, funeral plans have evolved to a point where you now get cash payouts as opposed to the standard arrangements of supplying a casket and organising the funeral. The cash option allows your family to have more flexibility on what they can do with the payout. Should the family use this money wisely, it will cover expenses after the funeral as well.
Learn more about funeral covers in South Africa: