When the principal member on a funeral policy passes on and the policy pays out, that doesn’t mean the end of the policy. Your family can keep it going - without having to pay the premiums for a certain period of time.
When a loved one passes, the family needs time to grieve without having to take on extra expenses. 1Life’s funeral policies have a premium waiver for 24 months when the principal member passes. During this time the family does not have to pay premiums.
Here is what you need to know.
Quick recap of how funeral policies workA principal or main member takes out a funeral policy. They are the owner of the policy and are responsible for making sure premiums are paid every month. The principal is insured for a specific amount, called the sum assured, which is the amount that the beneficiaries will be paid out if the principal passes away.
The principal member may also insure additional members on the policy. These could be their spouse, children and extended family members such as a second spouse, cousins, aunts and uncles. These additional members are insured for individual amounts, such as R30 000 for their spouse(s), R10 000 for their child and R20 000 for their aunt. Members need to be South African citizens.
What happens when a member passes?If an additional member passes the principal member is paid the sum assured of that additional member. They can use this amount to pay for funeral expenses. The policy continues because the owner of the policy has not passed, and the principal member must still ensure premiums are paid every month.
If the principal member passes the sum assured is paid to the beneficiary, who is named in the policy and must be an adult, not a minor. Although the main member and owner of the policy has passed, the additional members will continue to be covered under the policy for 24 months without the payment of premiums. This is known as the premium waiver benefit.
Premium waiver benefit What is a premium waiver?
A premium waiver is when a policy continues but premiums do not have to be paid for a specified period of time. It is similar to a premium holiday – and you don’t have to catch up when the premium waiver ends!
A 24-month premium waiver ensures the policy continues if the principal member passes
1Life funeral policies have a 24-month premium waiver. So, if the principal member passes, additional members are covered, and claims will be paid to the named beneficiaries up to 24 months after the principal member has passed. In this time the additional members don’t have to pay premiums; however, changes cannot be made to the policy during the waiver period.
What happens when the premium waiver ends?
Because the principal member and owner of the policy has passed, a new owner can take over and become the principal member. This is known as the continuation option.
Continuation optionWhat is a continuation option?
A continuation option is when a policy continues but the owner or principal member of the policy changes. You don’t have to take out a new policy.
Who can become the new principal member on a 1Life Funeral Policy?
The first spouse, or eldest additional member in the case where there is no first spouse, can be named as the new principal member. The new owner must be over the age of 18 and younger than 65, or 75 if they are a parent of the owner. The new principal member is the owner of the policy and is responsible for the payment of premiums, from the time the premium waiver ends.
When do I need to decide if I want to use the continuation option?
Within 90 days of the premium waiver period ending. If you choose not to use the continuation option, the policy will be cancelled.
What do I have to do?
Contact 1Life to let us know you want to use the continuation option and we will assist.
Making the difficult times easierThere is a lot of administration when someone passes so the less you have to immediately deal with the better. Your 1Life Funeral Policy premium waiver benefit gives you the space you need to make a decision on the policy, and ensures you aren’t burdened with extra expenses in a difficult time.