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Contracts can be complicated! Even the seemingly simple ones such as funeral policies have terms and conditions! If you understand funeral insurance terms and conditions you and your family will know what to look for in a policy and how to choose the right one for you, ensuring you and your loved ones can pay for a respectable funeral. We identify and explain the most important funeral cover terms and conditions.
Understanding the modern funeral insurance landscape
Insurance policies are legal contracts, so they will have terms and conditions to ensure that the policy owner and the insurer know what is expected of them. This ensures that the insurance policy is both valid and enforceable and will deliver what it says it will!
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Fortunately, insurance policies have come a long way from the multiple pages of small print of years ago! Today’s funeral policies use easy to understand terms and keep the conditions to a minimum. And, insurers are committed to, and required by regulations, to offer transparent insurance policies that deliver on their promises.
Deconstructing funeral policy terms and conditions
Your funeral insurance terms and conditions outline what you and your insurer have to do and when. For example, your insurer promises to pay a sum assured on a valid claim, when an insured member dies, and you as the owner of the policy agree to pay the premiums when they are due. You can find your terms and conditions in your policy schedule, document or book.
The most important insurance policy terms and conditions to know are:
Premium obligations
Your premium is the price you pay for your cover, and the cover for any additional members on your policy. Premiums must be paid by a due date. If you miss a premium the insurance terms and conditions have not been met, and the policy can be cancelled, or lapsed, and claims declined or reduced by the insurance company.
Members and additional member requirements
Members are the people insured on your funeral policy. There will always be a main or principal member on a funeral policy, and there may be additional members such as a spouse, children, parent or other family member. The main member owns the policy and is responsible for paying the premiums. Funeral cover terms and conditions will limit the number of members and specify that they must have a particular relationship to the main member, such as a legally married spouse, biological or officially adopted child, or marriage related parents-in-law.
This is the amount of cover that the life assured applied for with the insurer. When a member passes and a valid claim is made, your insurer will pay the sum assured. For example, you insure your life for an amount of R40 000. Each member will have their own sum assured as detailed in your policy documents.
Commencement date
The date on which the cover under the contract starts and the first premium is paid. If you have a prepaid funeral insurance policy you must check when cover commences and ends.
Beneficiary
The beneficiary is the person nominated by the main member as the person to whom the insurer pays a valid claim if the main member dies. Beneficiaries should be older than 18 years as anyone younger cannot receive a pay-out from an insurance policy.
Accidental death and natural death
Insurers distinguish between death due to natural causes and death due to accidental causes. Natural causes of death are old age or diseases such as cancer, heart disease, pneumonia, tuberculosis, influenza and COVID-19. Accidental causes of death are sudden, unforeseen events that include accidents such as car accidents or violence such as gunshot or stabbing.
Exclusions
This is when an event is excluded from the policy, such as if a member dies while committing a crime, and the insurer will not pay the claim. Exclusions will be listed in your policy documents.
Waiting periods
This is the time between when a policy or cover commences and when a valid claim can be made. Many funeral policies have a waiting period of 6 completed months and 6 premium payments, for death due to natural causes, such as a heart attack or cancer.
Benefits
Your policy may have benefits in addition to the cover, such as a repatriation benefit or grocery benefit.
Claims
A claim is when the main member or beneficiary asks the insurer to pay the sum assured because a member has passed. For claims to be valid, all the insurance terms and conditions must be met such as premiums must be paid, and the claim must not be made in a waiting period. The claims process must also be followed, which usually entails completing a claims form and submitting all required documents such as a death notice to the insurer, whereafter the claim is assessed, and a valid claim can be paid.
Funeral cover terms and conditions warning signs
You should be wary of two extremes when taking funeral cover:
- If there are lots of terms and conditions and they are difficult to understand, and
- If there are no or very few terms and conditions.
Meeting the needs of the tech-savvy generation
Insurance hasn’t just moved away from extensive terms and conditions and small fine print, it’s also moved into the digital world. South Africa’s innovative life and funeral insurers allow you to request quotes and buy insurance online, and manage your policy and update it online, at your own convenience and using a device of your choice such as a laptop and/or smartphone! Which means you can find funeral policies that meet your needs, don't include complicated terms and conditions in the contract, pay valid claims as expected and can be bought and managed online!
1Life funeral insurance delivers
1Life Insurance offers easy to understand, easy to take out and easy to claim on funeral cover. Up to 16 additional members can be covered on one funeral policy for different sums assured of up to R50 000. You can manage your policy at your own convenience, at any time of the day, using 1Life's WhatsApp service centre and online policyholder services portal. Valid funeral cover claims can be paid within 24 business hours so you and your family can pay the costs of a funeral in good time.
Peace of mind
Funerals can be expensive, so having funds available from a funeral policy can cover the costs, ensuring you don’t have any extra financial stress. It’s important to know your insurance terms and conditions so that when the time comes, your valid claim is paid quickly and your loved ones can have the respectable funeral they deserve.
We answer your questions about our products and services!
Are there any circumstances where the insurer can cancel my policy?
Yes. This can include circumstances where the main member dies or fails to exercise the continuation option post-premium waiver period, if premiums are unpaid after the due date and the 31-day grace period, or if the main member residing outside South Africa for over 60 (sixty) days without approval from 1Life Insurance. Additional members lose coverage upon death, benefit payout or residing abroad over 60 (sixty) days without approval. Ensure that you familiarise yourself with the policy book for full details.
Are there any restrictions on where or how the claim funds can be used?
No. Your family can use the pay out to pay outstanding debts, ensure the monthly bills are paid or even medical expenses that may have piled up. It's up to them.
Does the policy offer any flexibility for changing beneficiaries?
Yes. You can change beneficiaries at any time during the life span of your policy.
How does inflation affect the coverage amount over time?
Inflation causes the cost of goods and services to rise over time, including funeral expenses. As inflation increases, the cost of a funeral also tends to rise. To address this, some insurance policies offer an inflation-protected benefit that increases the coverage amount over time to match inflation. This guarantees that it will cover future funeral expenses.