What is Funeral Cover?

When we talk about the death of a loved one, we usually focus on the emotional pain of the experience and the trauma that it can cause. Of course, this response is completely natural, but there is another issue that loved ones are also faced with during these moments – How can I pay for all these costs? It may seem indecent to worry about money during these moments, but funerals are generally quite expensive and there are usually many other unforeseen costs that come creeping up during this challenging time. If you’ve ever lost sleep wondering about how these expenses will get covered when you or a loved one dies, you don’t have to wonder anymore. Various insurance policies exist which can cover these costs and provide peace of mind to the surviving family members. But how do they really work? What exactly is a funeral cover? And is it really necessary?

Funeral Cover is a type of life insurance that provides funds to beneficiaries of the deceased in order to help them pay for various expenses such as burial costs, groceries, transport, etc. 

Simply put, when a person with funeral cover dies, their loved ones receive a payout which can help them to cope with the costs that normally arise in such a scenario. Instead of leaving your loved ones with a bunch of expenses that they may not be able to pay for, a funeral cover plan can help them to manage during the immediate aftermath of your death. 

What is Funeral Cover?
What is Funeral Cover?

If you’ve looked into buying life cover before, you may be left wondering what the big distinction is between those policies and the ones you’d see as funeral cover. Rest assured, there are notable differences between the two. 

What is the Difference Between Life Cover and Funeral Cover?

The primary difference between life cover and funeral cover lies mostly in the extent of the benefits that they offer. In other words, funeral cover usually offers beneficiaries short-term aid that can help with immediate costs following the death of a loved one, ie, burial costs, airtime, and groceries

By contrast, life cover normally provides beneficiaries with much larger financial benefits which can help to provide for long-term needs such as student fees and mortgages. 

Life cover can even include funeral cover in certain circumstances while the funeral cover is more of a standalone item. 

As a result, a beneficiary from a funeral cover plan can expect a modest sum of money that will normally cover immediate concerns while beneficiaries from a life cover plan can usually expect much, much more. 

Additionally, life cover can include payouts for certain illnesses and disabilities, and thus, it may come into effect even when the policyholder is still alive. Funeral cover, on the other hand, will only apply upon the death of the individual in question.

What are the Benefits of Funeral Cover?

Although each funeral cover policy will offer slightly different benefits, they are, for the most part, quite similar. 

Most funeral covers will provide surviving relatives with the funds needed to deal with the burial of the deceased as well as certain associated costs such as transport, airtime, gravestones, etc. 

Overall, the funeral cover helps to provide peace of mind to the policyholder. Such individuals can rest easy knowing that, when they die, their family members won’t be saddled with debt after paying for their funeral. 

Is Funeral Cover Necessary?

Generally speaking, the funeral cover is seen as a necessary expense for responsible adults who don’t wish to burden their relatives with excess costs upon their death. 

That said, if you do not have any remaining loved ones, you may not need to worry about monthly insurance payments just to cover expenses that won’t necessarily bother anyone once you’re gone. 

In other words, you will have to consider your own personal situation to determine whether or not funeral cover is a worthwhile investment for you. 

What is Funeral Cover?
What is Funeral Cover?

Can I get a Funeral Cover for my Parents?

Yes, you can. Various funeral cover policies exist which can cover multiple members of your family, including your parents. 

Can I have 2 Funeral Plans?

Yes, you can, but it may not be a good idea. Most funeral plans can adequately cover your expenses, so there’s really no need to have multiple plans at once. Additionally, people with multiple funeral plans run the risk of being overinsured and losing benefits

How Long Does it Take for Funeral Covers to Payout?

Once the relevant paperwork has been completed, most funeral covers payout within 24 hours.

Who Pays for a Funeral if I Have No Money?

Tragically, some people pass away in isolation and do not leave behind any friends or family members who can cover the costs of a funeral. Or, alternatively, there may be surviving relatives of the individual who are unable to deal with the various funeral costs due to their financial situation. 

In both cases, the responsibility of providing a funeral normally falls to the local municipality.

If you don’t have the money to pay for the funeral of a loved one, the local municipality will step in and provide a simple and dignified burial or cremation service for the deceased.

Obviously, in such scenarios, the service will not be particularly opulent and any surviving family members cannot be too picky when it comes to the various elements involved.

How Much Do Funerals Cost In South Africa?

The price of any funeral is going to be dependent on the different expenses you choose to include in it. 

  • Simple funerals that just cover the basics like burial, transportation of the body, a small service, etc., will usually cost between R6000 – R10 000.
  • More elaborate funerals that include higher quality coffins and headstones, as well as meals for guests and a better venue for the service, can end up costing between R10 000 – R50 000.
  • Extravagant funerals which involve the use of private cemeteries and high-class venues can end up ranging in cost from hundreds of thousands of rands to millions. 

At the end of the day, the precise cost of a funeral is going to depend on what you want. Let’s take a look at the price of coffins to highlight this point – 

  • A low-cost coffin can be bought for less than R1000 and can help to cut down on one of the most expensive parts of the event. 
  • A medium-cost coffin would normally go for between R5000 – R10 000. This is the expected cost for many families who are considering a burial service. 
  • A high-cost coffin could be priced somewhere between R20 000 – R50 000+. 

Hopefully, this extreme range in prices demonstrates how influential the specific funeral arrangements are when it comes to determining the overall cost of the service. 

What is Funeral Cover?
What is Funeral Cover?

In Conclusion – What is Funeral Cover and Is it Worth it? 

A funeral cover is a form of life insurance that offers benefits to loved ones upon the death of the policyholder. These benefits differ depending on the insurance agreement in question but usually include payouts for things like burial costs, groceries, and transport following the passing of the individual. The main difference between funeral cover and life cover lies primarily in the size of the benefit paid out to the loved ones of the deceased. 

Funeral cover plans usually provide enough money to use as short-term aid and for certain arrangements related to the funeral itself. By contrast, life cover plans normally pay out much larger sums of cash to beneficiaries and can often provide long-term aid in the form of debt repayments and a financial safety net. 

The specific benefits provided by your funeral cover will depend on the nature of the cover itself. Some contracts require less funding and payout a modest sum upon death, while others require steeper monthly payments but can provide your loved ones with a much larger payout. 

Mostly, the funeral cover is used to provide peace of mind to the policyholder as they do not need to worry about the financial stability of their loved ones after they’re gone. The necessity of funeral cover is also something which will be determined by your personal situation. If you worry about how your relatives would pay for certain costs following your death, you may find it worthwhile to invest in a cover plan while you’re still alive. On the other hand, a person who is not leaving behind any family or friends may not see the need for the extra cost of funeral cover. 

In the event that a loved one passes away and no person comes forward to pay for the funeral (or if the necessary funds can’t be found), the local municipality will provide a modest burial or cremation service for the deceased. The cost of a funeral can vary wildly depending on the choices made by those arranging it. Simple funerals can be quite reasonably priced while more elaborate affairs can end up costing hundreds of thousands of rands. 

Disclaimer Finance101: All of our posts are for research purposes only. Finance 101 aims to assist its readers with useful information on the laws of our country that can guide you to make financial decisions that will enable you to become more financially independent in the future. Although our posts cite the constitution in many instances, they are intended to assist readers who are looking to expand their knowledge of the law & finance-related queries. Should you require specific legal/financial advice we advise you to get in touch with a qualified financial expert.

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