Let’s get smart about life insurance
What’s the difference between funeral cover and life cover?
Funeral policies cover funeral costs while life cover is focused on the long term
Funeral cover provides for some (or in some cases, all) of the costs involved with a funeral, including burial or cremation, flowers, transport, groceries, and airtime.
Life insurance aims to provide for your family in the long term, ensuring they are well taken care of financially should something happen to you. Life insurance does not only cover you when you die, it can also cover you if you are critically ill or become disabled. Your life policy can also include funeral cover.
Funeral cover is paid out quickly, whereas life cover can take longer
Because of the nature of what they cover, funeral policies are paid out soon after the claim is made, usually between 24 to 48 hours of the insurer getting all the documentation. Insurers know, in the case of funerals, time is of the essence. With life insurance, the payment may take a bit longer, depending on the type of claim. Funeral policy payments are most often paid as lump-sum, whereas life cover can be paid in a lump sum, monthly, or a combination of the two. This depends on the type of policy you have.
Both of these types of cover are about putting less financial strain on families
With funerals, you would like to be able to give your family members a dignified send-off. The last thing you need to worry about when planning it is how you'll pay for it. Similarly, life insurance covers your family during a difficult time, whether it's because of your death or you're seriously ill or become disabled. Life insurance aims to ensure your loved ones have the same standard of living after something happens to you.
It’s best to have both life insurance cover and funeral cover
Because life insurance policies and funeral policies cover different things, it’s best to provide for both in your monthly budget. The costs of funerals are important to plan for, but life insurance will give you and your family more financial security if something happens to you. Many life insurance policies include funeral cover, so you can buy both for one monthly premium.
A financial adviser can help you
Insurance products can be complicated. Making the wrong decision can have serious consequences for you and your family, so it’s worthwhile to shop around for the best advice. Fortunately, many well-qualified financial advisers can answer your questions, provide clear explanations, and help you understand what you’re buying when it comes to funeral policies and life insurance.
Financial advisers must meet strict regulatory requirements and be licensed with the Financial Sector Conduct Authority and product providers. You have the right to ask your adviser for their credentials and ask whether they are independent or work for a specific product provider.
This consumer education article was made just for you by BrightRock.
BrightRock Life Ltd is a licensed financial services provider and insurer. Company registration no: 1996/014618/06, FSP 11643. Terms and conditions apply.
This article was paid for by BrightRock.