What you need to know about funeral policies
29 July 2021 | Life Style
Many consumers only place emphasis on the cost of their monthly premiums and the lump sums that will be paid out in the event of death, and mistakenly ignore important detail in their policies. Garrels advises to ask these important questions when taking up cover:
•Who qualifies as a nominated beneficiary?
It has to be a natural person and cannot be a company, business, charity or trust. Some insurers may also require the beneficiary to be a spouse or family member.
•What if the nominated beneficiary passes away?
It will be important to update your policy immediately and nominate a new beneficiary. If the nominated beneficiary is no longer around or has passed away, the benefits would be paid into your estate.
•Does the policy have a waiting period?
However, for natural death and suicide, the waiting period for most insurers is 6 and 24 months, respectively. There’s often no waiting period for accidental death.
•Can I add my newborn child to the policy?
Most insurers require that a newborn child be added three months after their birth in order to be covered. Alternatively, the normal six-month waiting period will apply.
•What if I skip a payment due to financial distress?
Your insurer will collect a double premium the following month. If collection fails for the second time, the policy will lapse.
•How do I claim?
Some insurers require the claimant to submit a certified claim form, notice of death form, death certificate and a copy of their ID.
•Will my policy lapse if I pass away?
Some insurers will give a spouse an option to continue with the policy as the new principal member, if a spouse was insured under the same plan.
“Although getting funeral cover is essential to safeguard you against unforeseen burial expenses, it is equally important to carefully read, understand and seek clarity about your policy from your insurer to avoid unpleasant surprises in the unfortunate event of death. For peace of mind and one less item to worry about, we recommend that consumers familiarise themselves with their policies and ensure they are conforming to all their needs and wants. FNB Insurance and Fiduciary offers assistance to customers and we encourage the public to speak to us to get their affairs in order.” concludes Garrels.