Funeral Insurance vs. Life Insurance
Almost daily we get clients that don’t fully understand the difference between life insurance and funeral insurance. Although both products have similar outcomes, they don’t offer the same benefits. Both products are essentials in your basic insurance portfolio. By no means are one designed to replace the other – unless specifically designed to do so.
First of all, it’s important to know that both products are designed to relief financial strain at the time of death. Funeral insurance will be used to cover the cost of the funeral. Life insurance can be used to settle large amounts of debt etc. Both types of insurance will provide the beneficiary with a cash pay-out. However, the pay-outs will be used for different things.
Below are the basics of both products. This is a watered down explanation, for more information please see detailed articles.
Funeral insurance is paid upon the death of the insured live(s). The maximum amount of cover will usually be R60 000. There are no medical examinations required to get funeral cover. The money will usually be available within 48 hours of a claim. You can include various family members in your funeral plan. Premiums are very affordable. Usually includes accidental death cover at no additional cost. The pay-out will usually be enough to cover the funeral. The amount will usually not be enough to settle large amounts of debt.
Life insurance is paid upon the death of the insured live. The insured amount can be much higher than funeral insurance. Depending on the insured amount, you will usually have to undergo some form of medical checks. The money can sometimes take months to release. The pay-out will often have to go through the estate. Premiums are higher than funeral insurance due to the large cover amount. This pay-out can be used to settle mortgage or other debt. It can also be used to provide for a family left behind.
So in a nutshell, funeral insurance is usually much easy to obtain – and very affordable. The pay-out will be made much quicker. The amount will only be sufficient to arrange a funeral. Life insurance will usually be a much larger pay-out; however, the money will take longer to release.
Most people will have both types of insurance. Although they both offer a cash pay-out, they don’t serve the same purpose. When you pass away, it’s extremely important to have funds available quickly. A deserving funeral must be arranged as soon as possible. Funeral insurance will ensure that the funds are available.
We offer both life and funeral insurance. Depending on your own needs, please complete the contact form. We will get in touch as soon as possible. If you are interested in life insurance, please tick the box on the contact form.
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