Choosing the right funeral cover amount
Many consumers who take out funeral cover often struggle to choose the appropriate cover amount for funeral expenses.
Nthabiseng Sethabela-Makoeng, Product Manager at FNB Life says, when deciding on the correct cover amount, it is essential to abide by the most basic principle of funeral insurance, which is to ensure that family members or beneficiaries have the financial means to provide the deceased with a dignified send off in the unfortunate event of death.
“Because every family is unique, the concept of a dignified funeral often differs as consumers have individual preferences and standards they adhere to. Therefore, the stipulated funeral cover amount should meet the expectations of the family without additional funds having to be raised,” says Sethabela-Makoeng.
She points out three factors that consumers should consider when choosing the correct funeral cover amount:
“Although paying a lower premium may save you money in the interim, the corresponding cover amount may not be adequate. When a death in the family occurs, it may set back beneficiaries financially as they would have to provide for the shortfall from their own pockets,” cautions Sethabela-Makoeng.
As a starting point, consider taking a five-year view and adjusting the cover amount accordingly. This is more practical than reviewing and adjusting your cover amount on a yearly basis.
As a result, consumers who don’t consider post funeral expenses when choosing the cover amount may find themselves having to borrow money to cover additional costs.
“Although death is not a common dinner table discussion, it is essential for policy holders to discuss the funeral cover amount with their family members or beneficiaries to determine what constitutes a dignified funeral and the cost thereof. This will help to ensure that the correct funeral cover amount has been selected,” concludes Sethabela-Makoeng.
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