Know the difference between funeral cover and life cover

Discovery Life offers comprehensive, flexible and market-leading protective policies to take care of your family’s need

13 April 2021 - 12:38
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Discovery Life provides comprehensive cover that also rewards you for living well.
Discovery Life provides comprehensive cover that also rewards you for living well.
Image: Supplied/Discovery Life

Life insurance cover and stand-alone funeral plans are basically the same thing, right? Well, not exactly. Discovery Health breaks down some of the basic differences between the two.

A life insurance policy factors in funeral cover benefits, offering a financial safety net for a family, which can be helpful in both the short and longer-term. Life insurance offers a wider range of protective cover for beneficiaries and insured policyholders in the event of life-changing circumstances, such as a sudden loss of income, the development of a severe disease or disability, or loss of life.

A stand-alone funeral policy offers cover for a family’s immediate needs after the loss of a loved one, providing financial support during a difficult period of time.

What are some of the differences between the two when it comes to funeral cover?

Both policy types pay out a lump sum when an insured individual passes away. Funeral policies typically pay out within 24 hours once the necessary paperwork has been completed.

With a life policy, plans involve more than just funeral cost needs. This means that a lump sum payout will take an appropriate amount of time to process to provide all of the cover support a family would need after the loss of a loved one. A life plan involves more long-term financial support for insured loved ones, with cover that may include severe illness and disability, as well as income and education protection.

Each policy type provides cover amounts for differently structured needs. For example, a funeral policy may provide R20,000 worth of cover, whereas a life insurance policy can offer, for instance, R250,000 worth of cover. The difference in cover amounts relates to the benefit structure of each.

A funeral policy covers just the short-term financial needs of a family, such as the costs of a burial or cremation, grocery purchases and airtime.

Which type of policy is best to choose?

Many people confuse the two policy types and see them as the same kind of offering. As the amount of cover each policy type offers is different, It’s wise to consider what your needs will be in the short and long term before committing to a purchase.

Discovery Life provides comprehensive cover that also rewards you for living well.

1. Funeral benefits that take the best care

Discovery Life’s funeral benefit is a comprehensive plan that protects your family from R53 a month. Along with funeral cover that pays out between R10,000 and R60,000 within 24 hours of the loss of a loved one, plans available offer several other valuable benefits.

These include:

  • A double cash payout if an insured policyholder and their spouse pass away in an accident, up to a maximum of R100,000;
  • An educational needs payout of up to R4,500;
  • A cash lump sum of up to R3,600 that can be used for the purchase of groceries;
  • Unveiling cover for R5,000;
  • Automatic cover for a baby for the first three months after birth;
  • Continued cover for a policyholder’s spouse and children should they pass away; and
  • Yearly premium paybacks of up to 17.5% for policyholders on the Classic Funeral Plan.

2. Plans that enhance quality of life through comprehensive protection

Discovery Life offers comprehensive, flexible and market-leading protective policies to take care of your family’s needs with an array of supportive benefits. Plans are also structured to reward you for living well during your lifetime.

Other than comprehensive funeral cover, these policies also include severe illness, child protection, capital disability, income continuation and global education protector benefits.

Learn more about Discovery’s Life insurance plan options and rewards here >>>

Learn more about Discovery’s Funeral cover offerings here >>>

Discovery Life Limited. Registration number 1966/003901/06, is a licensed insurer, an authorised financial services and a registered credit provider, NCR Reg No. NCRCP3555. No liability will be accepted for the effect of any future legislative or regulatory changes. Product rules, terms and conditions apply.

This article was paid for by Discovery Life.