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Your funeral plan ensures you and your family can pay for a respectable funeral service and burial for loved ones when the time comes. But how much will your funeral policy cost? We identified the key factors that affect your funeral cover premiums to help you buy cover that suits your family and your budget.
Understanding funeral cover premiums
Your premium is the amount you pay for the cover and benefits you have, such as R250 a month for a sum assured of R40 000 each for you and your spouse, and a R30 000 sum assured for your 16-year-old daughter. Individual premiums will depend on the sum assured, benefits, factors such as your age and gender, and any other applicable terms and conditions. The sum assured is the amount that will be paid out if you claim for that member on your funeral policy.
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Factors affecting funeral cover premiums
The two main factors affecting your premiums are the number of members covered on your funeral policy and the sum assured for each member. Other factors affecting premiums include benefits and whether or not the policy is underwritten.
Sum assured for each member
Your sum assured per member is the cover each member has, such as R40 000. South African regulations limit the total sum assured per adult member to R100 000, however most licensed insurers only allow cover of up to R50 000 per member. This helps keep funeral policy premiums affordable for policyholders. The higher the sum assured, the higher the premium.
Number of members covered
Although you will pay one premium per funeral policy, insurers calculate the cost of cover per member when working out the total premium. The more members covered on a funeral insurance policy, the higher the policy premium. However, covering family members and extended family members on one funeral policy should be cheaper than covering each member on their own funeral policy.
Benefits
Benefits such as a memorial headstone benefit, grocery benefit or any cashback benefit will also affect your funeral premium. Many insurers have a basic benefits package that is included in policies, such as memorial headstone benefit and grocery benefit. These will help your family financially in the weeks and months after your passing.
You may be able to reduce premiums, but only by a small amount, if you opt for a funeral policy that offers no benefits.
Underwritten versus non underwritten policies
Underwriting is the process of assessing an insurance application to determine how much and what type of cover will be offered and at what premium.
When your policy is underwritten you have to answer question about your health, occupation, education, income, and any dangerous hobbies. You may also have to go for medical tests such as an HIV test and blood pressure check. If you are young, healthy and don’t have a risky occupation or hobby, you may qualify for a low premium. However, if you are not healthy you may be declined cover.
To make funeral cover easy to apply for and take out, and to ensure that as many South Africans as possible qualify for funeral cover, many insurers do not underwrite funeral cover policies. This means that premiums are the same for similar members, such as R150 for R50 000 cover for females aged 30 years old. Individual premiums will depend on the sum assured, benefits, factors such as your age and gender, and any other applicable terms and conditions.
A note on funeral premium increases
Funeral cover premiums usually increase from time to time, such as once a year on the policy anniversary date. They may increase by a set amount, such as 5% a year, or they may increase based on your age, such as 5% when you are 30, and 8% when you are 40. Your insurer must give you details of how premiums may increase when you apply for a funeral policy, and they must tell you in advance of any increases.
Selecting the right funeral cover for you
Your premium will be affected by the factors listed above, such as how many members you need to cover on your funeral plan. When you compare funeral plan premiums to find a plan with an affordable premium, make sure you compare like with like, such as compare premiums for the same cover for the same members.
You should also take other factors into consideration when selecting a funeral plan. Make sure that you select an insurance company who offers easy to understand contracts, allows you to use online options to buy and manage your policy, and pays valid claims quickly!
Get covered by SA’s most loved and trusted insurer
With 1Life Funeral Cover you can add up to 16 family members on one affordable and convenient policy that includes a R5 000 headstone memorial benefit, a R6 000 grocery benefit plus a repatriation service. Policies pay out up to R50 000 per member.
Policy premiums are guaranteed for the first 12 months of the policy. You can manage your policy online using our online policyholder portal and WhatsApp service centre. Valid claims are paid within 24 business hours, often faster, so you can pay for funeral costs and give your loved ones a respectable service.
Ready to take the next step? Buy 1Life Funeral Cover online and save 40% on your monthly premiums!
Make sure your funeral premiums are affordable
Knowing how much your funeral premiums are and ensuring they are affordable will give you and your loved ones the cover they need. And if you need to, at some point down the line, you can adjust your funeral cover policy to make sure your premium stays within your budget!