South Africa’s middle-income earners often overlook the need to take up funeral insurance and instead choose to only have comprehensive life cover, expecting it to settle the cost of their funeral.
According to Lee Bromfield, CEO of FNB Life, “middle-income earners do not always recognise the need for a funeral cover until they have encountered tragic circumstances which prove how useful it is to have such cover. Another misconception is that once you have life cover, funeral costs are automatically taken care of but this is not always the case because life cover has stricter requirements which need to be fully satisfied before paying-out.”
Bromfield says middleclass needs to understand that taking up a funeral cover is simply a precaution, just like your car or household insurance. More importantly, it has very little to do with one’s age.
“The notion that only older citizens should have funeral insurance is highly inaccurate because even though South Africa’s mortality rate has been declining over the years, we still lose a lot of predominantly young and middle-class citizens due to many factors, including road accidents.”
In 2014, Stats SA reported that the percentage of deaths due to injuries for men was above 60% in the 20-24 age-groups. The percentage of deaths due to injuries among women was at 28%.
Bromfield says, “The dominant trend in the market is that middle-income earners frequently take up funeral cover for their parents or other members of the family, excluding themselves. However, we are increasingly educating our customers that there is more value and better cost saving when taking up cover for the whole family.”
“Whether you are young or old, the reality is that it is important to leave nothing to chance if you are in position to alleviate the burden of funeral costs on your family. Funerals can be quite expensive and not many people have readily available funds to cover the unexpected cost. Funeral cover should be one of the basic considerations for any income earner,” concludes Bromfield.
