So why do I need life cover if I have funeral insurance?

2 January 2024
4 minute read

Meet Samantha and her family of two. Samantha has a funeral policy so when she passes away, her family can pay for the funeral using the funeral policy pay-out. But, the money is only enough to pay for Samantha’s funeral and without her income her family don't have enough to pay their monthly living expenses and have to move in with relatives to save money. Now, meet Thando and his family of four. Thando has both funeral and life cover policies. When he passes away his family has money for after the funeral, so they can cover all their living expenses using the pay-out from his life cover policy, as well as the funeral costs using the funeral policy pay-out. Thando’s family miss his love and care, but, they have security knowing their bills can be paid without his income. Could your family pay their bills if you passed, or would they have to reduce their standard of living like Samantha’s family? With life cover, you can be like Thando, and give your family financial security, long after the funeral!

The moral of our story is that your family needs life cover as well as funeral cover because they are different policies that meet different financial needs.

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The difference between life insurance and funeral cover

Although life cover and funeral cover pay a beneficiary a lump sum amount on the death of the insured, they fulfil different needs.

  • Funeral cover is intended to only pay for the costs related to a funeral, and the sum assured with your 1Life Insurance funeral policy ranges from R5 000 to a maximum of R50 000 per member (different limits may apply for members under the age of 18).
  • Life cover is intended to help a family financially when an income earner passes by ensuring they can continue paying their daily living expenses such as food, housing, transport and education post a breadwinner's funeral. Depending on your policy, life cover can help pay expenses for at least 10 years, often 20, because you can take a much bigger sum assured on a life policy. For example, based on your risk profile, the sum assured on a 1Life Insurance life policy can be up to a maximum of R10 million.

There is no question that if you have loved ones who rely on your income for day to day living expenses, they would suffer financially if you were no longer around to support them, so you need to get life cover for them.

Let’s get Samantha covered!

Let’s turn back the clock for 30-year-old Samantha and her family. For just R365 per month she bought a R600 000 life insurance policy. When she passes away her family could remain in their home and cover living expenses without having to rely on relatives. Now that is a much happier ending to her family’s story!

Life cover applications and claims

A key difference between life and funeral cover policies is that life cover policies are underwritten, which means various risk factors are assessed

For example, when you apply for life cover you will need to answer some medical questions about your health and any existing illnesses or chronic conditions you might have. We may also require an HIV test, which you can do using a cheek swab at one of our partner pharmacies. If required, the HIV test needs to be completed within 3 months of the commencement date of the policy. Importantly, the medical information you share with 1Life Insurance is confidential And, most people who apply for life cover qualify for life cover!

You can choose how much cover you want on your policy (up to a maximum of R10 million), although the more cover you choose, the higher your monthly premium. If you cannot afford all the cover your family needs, you can always increase the sum assured over time when your finances allow! Remember, some is better than none. Just think of the difference a R300 000 pay-out would make to your family. They could also invest some of it to ensure it lasts for many years!

Valid life cover claims can take a little longer to process than valid funeral cover claims, which can be paid in 24 business hours, after all the documents are received and the policy terms and conditions have been met, such as the premiums have been paid. 1Life’s skilled claims consultants will guide your beneficiary through the claims process when the time comes.

Funeral cover and life cover can help your family

Life and funeral cover policies offer different financial solutions to the financial needs families experience after the death of a breadwinner. If your family would be unable to pay all their expenses without your income, you may need life cover as well as funeral cover. Your life policy pay-out will never replace you but will ensure your loved ones don’t face financial hardship while they grieve you!

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