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Life Insurance Or Funeral Insurance - An Investigation

Let's say you have elderly parents and you want to have some form of life insurance coverage for them because the cost of a funeral is certainly not cheap. Are you better off getting a funeral plan from your South African insurance provider or is a life policy the best way to go?

Although funeral policies don't always get positive press you may be surprised to learn that the insurance experts recommend them over life insurance policies if the person being insured is elderly.

It all comes down to the actuarial work of bean counters who ensure that insurance companies don't go bankrupt providing coverage to people who won't be around long enough to recoup cost of the coverage. If your father is 65 and you'd like life insurance for R1 million on the oldster you'd best be prepared to fork out R15,000 a month in premiums, and that's assuming he's in tip-top physical condition!

The insurance companies know the average life span of people in perfect health so if the insured individual is only going to live for 10 more years (on average) then they need to make back that million Rand before that time.

For that reason alone funeral plans or policies are better for the very aged. However, if you are young and in good shape it makes a lot more sense to take out life insurance as opposed to funeral coverage.

The caveat is to make sure that you get a funeral plan from a reputable company, and in South Africa there are a lot of shady ones on offer, which is unfortunate but true, so buyer beware.

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2/22/2011 3:54:20 PM
life insurance
Tuesday, February 22, 2011

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