Funeral Cover gets grouped together with Life Cover, because it pays on death.
Some companies might even include a portion of Funeral Cover in their Life Cover offering.
The difference between Funeral Cover and Life Cover, is that Funeral Cover pays out within 48 hours after all claim paper-work has been submitted. Because the claim is processed faster and some factors might get over-looked, the additional risk is built into the premium. Therefor, Funeral Cover is more expensive than Life Cover.
The fact that Funeral cover is more expensive has not deterred the Mass-Market, as it is by far the most popular product. Cultural trends throughout history has emphasized the importance of a proper burial. This can be seen in Roman and Egyptian traditions and are definitely a contributing factor to the trend in Africa.
The Purpose of Funeral Cover is also Different to Life Cover. Funeral Cover provides immediate liquidity that provides for:
– The Burial
– Immediate Expenses to maintain dependents lifestyle
– Clearing debt
To compare to the purpose of Life Cover read the article titled:
“The purpose of Life Cover“
There is also a tendency to take up cover for Extended family members. If you are responsible for a parent or family member, it might be better to have excess cover amounts fully underwritten and ceded to you.
If you would like us to review what you have and create a Personalised Risk plan that takes into consideration your money and circumstance – click the link below for Your Money Plan.
We’d love to include you in our mailing list.
Follow our Blog
Get new content delivered directly to your inbox.
Inception - Financial Planning 