Unmasking the True Difference Between Life Insurance and Funeral Insurance: Which Policy is Best for You and Your Family.
Losing someone you love is one of life’s most difficult challenges, in fact, there can’t possibly be anything worse until you compound this loss with the strain and cost of planning a funeral. It may seem like a daunting and morbid monthly cost but being prepared for the future is essential in helping shield you and your family from a financial crisis in a time of extreme hardship.
Taking our insurance can be overwhelming as there are so many different companies and policies available, that it can be hard discerning which one is right for you. There are two primary policies for life coverage; Life insurance and Funeral Insurance, but what differentiates these two policies and what does each option have to offer you?
It’s important when choosing between funeral insurance and life insurance to consider the needs of your dependants and what you wish to be taken care of after your death. While both policies pay out in the event of the policyholder’s death each policy is made to cover different financial situations.
Funeral insurance is a type of short-term insurance that provides coverage specifically for all funeral-related expenses. Covering everything from groceries and airtime, tent and table, catering and casket, as well as flowers and transportation. Funeral Insurance can pay out anywhere between R75,000 to R100,000 covering both your intermediate and extended family members with low premiums that they can actually afford. Funeral insurance allows you to give your loved ones the dignified funeral that they deserve. The key benefits of funeral insurance are;
Funeral Insurance is very straightforward as it only covers the cost of the funeral and its preparations. There aren’t any hidden cost or clauses to be considered.
Inexpensive Monthly Payments
Funeral insurance is one of the most inexpensive policies on the market with the average cost ranging anywhere between R3,000 to R10,000 monthly.
No Medical Exam
Funeral insurance is paid out upon the death of the policyholder, therefore, there is no medical exam done during your application process.
Funeral Insurance provides a prompt pay-out once the policyholder has passed away. You can process your claim and receive the benefits of your policy within 48 hours.
Life Insurance is more of a long-term insurance policy. It is designed to provide coverage for any long-term consequences of life after death. Life insurances ensure there is enough coverage to settle all outstanding debt as well as provide substantial financial income for your dependents who are left behind. The key difference between Life and Funeral Insurance is that Life Insurance usually pays out a once-off lump sum of three times the policyholder’s annual salary – this to be used however the beneficiary wishes. It’s very important that the beneficiary spends this money wisely, either on an endowment or education something that will help add value to their lives over time. The key benefits of life insurance are;
Range of Coverage
Depending on the type of Life Insurance you take out, you can be covered for death, accidents, illness or injury.
Choice of Pay-Out
Life Insurance allows the beneficiary to use the benefit pay-out however they like. It does not have to be used for something specific like a funeral.
Life Insurance covers a wide range of expenses and can be used for anything the beneficiary deems important. Your Life Insurance pay-out can be used for paying off debt, funeral expenses, education or ongoing living expense. This lump sum allows your family to focus on more important things other than worrying about finances.