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Got enough cover, or are you underinsured?

4 December 2023
5 minute read

Billions of rands in insurance claims are paid to South African policyholders each year. But how do you know if the pay-out your family receives from your policy will cover all their expenses? We show you how to work out if you have enough funeral and life cover.

Funeral cover for your whole family

Funeral cover ensures you and your family members can have a respectable funeral and so serves to cover immediate expenses when someone passes away. Check your funeral policy and ask yourself these three questions to find out if your policy will cover all the funeral expenses:

1. Are all my family members covered by my policy?

Make sure all your family members have funeral cover, including extended family members such as grandparents, aunts, uncles and cousins (related by blood or marriage). Also check that new family members are covered, such as your spouse, if you marry, if you have a baby, or other new family members, such as if you take over caring for a cousin.

When all your family members have funeral cover, you know you won’t have to dig into your savings or go into debt to pay for the funeral of a family member who has passed on.

2. Will policy pay-outs cover the cost of a funeral?

Inflation affects funeral costs too! Prices may have risen since you took funeral cover or reviewed your cover, so check that the sum assured for each member is still enough to pay for a burial.

Funeral costs can include:

  • Undertaker fees
  • Burial plot purchase or cremation
  • Coffin or urn
  • Service and graveside gathering
  • An after-funeral gathering or wake
  • Transport of members to and from the service

Top tip: Don’t miss this blog for more detail on the cost of a funeral

Pay special attention to any child members on your policy. Children qualify for different amounts of cover, depending on their age. You can check this with your insurer.

As your child ages they may need more cover, so take this into account. And don’t forget that children are only covered up to age 21, or age 25 if they are full time students, on 1Life Insurance funeral policies. If your children are no longer eligible for cover on your policy as child members, find out if they can be covered as adults on your policy or encourage them to take out their own funeral policy. They can get a right here on the 1Life Insurance website and even save 40% on monthly premiums if they          

You can find your sum assured on your policy schedule. Chat to us on WhatsApp to request a copy of your policy schedule or visit the 1Life online policyholder service portal to access your policy details.

Top tip: Be conservative and aim for a respectable funeral, not the most elaborate and expensive option. This will ensure you have enough cover and that your premiums remain affordable.

3. Have I included the costs of memorials and a headstone unveiling?

These usually take place one year after the passing. Headstone costs vary greatly, but if you plan for a modest, respectable headstone, your sum assured, or headstone benefit should cover the cost.

Did you know? 1Life offers a R5 000 memorial headstone benefit on 1Life Funeral Cover policies.

Enough life cover will give your family financial independence

The pay-out from your life cover policy can ensure your family has enough to pay any debts and their living expenses, including school fees. This ensures your family does not suffer financial hardship if you pass on and lays the foundation for generational wealth for future generations, as your life cover pay-out is for future expenses, post the funeral.

Check that the sum assured on your life policy will still cover your family’s expenses if you are no longer around to contribute financially. These are three questions to ask yourself to find out if you have enough life cover:

1. Have there been any changes in my family?

You may have married or remarried, had a new baby or started caring for a relative. These are big life changes and they change your family budget. Your sum assured on your life policy needs to reflect this. For example, if you have a new baby you may need to increase your sum assured so that their school fees can be paid if you pass.

2. Has my standard of living changed?

Ask yourself if your standard of living has increased since you first took out cover – because you got a promotion, a salary increase, or changed jobs. If your standard of living has increased, your sum assured should too!

3. Have your financial commitments increased?

Taken on more debt, increased your home loan, or bought a new car? Your debts will need to be paid if you pass on, and life insurance is one way they can be settled. If you owe more than you did when you took out your policy, your sum assured may need to increase to cover these debts!

The next step

When you’ve reviewed your cover and answered the three questions above, you now need to ask:

“Do I have enough cover?”

If the answer is “Yes!” 

Well done! Ensure you review your life policy in a year as costs may have increased, or your circumstances might have changed. Also look at ancillary offers such as dread disease and disability cover.

If the answer is “No, I am underinsured!” 

Contact a financial adviser or insurer, or one of 1Life’s skilled consultants, about increasing your cover.

Unsure? Check in with a financial adviser or one of 1Life’s skilled consultants, who can help you determine how much cover you need.

Top tip: Schedule a review in a year: Your circumstances may change from year to year, so schedule a review of your insurance annually to make sure you are still adequately covered.

Final thoughts

Not having enough insurance cover can place your family in a difficult financial position and leave them without the funds they need to pay for a funeral and their living expenses. When your insurance policy pay-out covers these expenses, your family wealth is intact, and your heirs have the means to create generational wealth for their children and grandchildren – just as you created it for them, so ending generational debt.

Increasing your cover doesn’t need to increase your premium too much, and the few extra rands will make sure your family is financially secure – a lasting legacy we all want to leave! Review your cover amount today!

Published on: 11 October 2021
Updated on: 4 December 2023

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