Having more than one funeral policy in South Africa can have several benefits and drawbacks. Let’s take a look at some of the reasons why someone might take out multiple funeral policies and whether this is a good idea or not.
The Payout Limit
In South Africa, the law states that funeral insurance policy providers are limited to paying out no more than R100,000 per policy per insurer.
In other words, if you were to take out two policies from the same insurer, the sum of those two payouts could not exceed R100,000.
However, you are allowed to take out multiple insurance policies from multiple different insurers without a limit on the combined total payout. If you take up two R100,000 insurance policies from two different insurers, then ultimately, you would be entitled to R200,000 when both different insurance payouts are combined.
While this might increase the total payout limit, it also means having to pay multiple premiums, which can be expensive in the long run.
In addition, ensuring that both policies are valid, viable, and not in conflict with one another can be administratively demanding. When it comes time to claim, you could face disputes regarding the validity of one or more of the policies, which could lead to frustration and a delay in receiving the funds owed to you. In some cases, insurers might outright deny payment.
While this approach to insurance is possible and legal, it is generally not recommended, owing to the high cost and added risk.
Comprehensive Benefits
Different insurers might offer different insurance policy benefits or additional coverage options. These might include benefits like repatriation service’s or extended mourning support for the family, among other things. However, not all funeral insurance policies will offer the same benefits.
Therefore, by signing up for different funeral insurance policies, you can reap the rewards of a variety of different benefits.
On the downside, there is the notable risk of paying twice for the same benefit. Having redundant benefits across multiple policies, which overlap or duplicate, can make the total cost of your insurance more expensive than it needs to be.
The Potential Costs
The potential costs of a funeral could be quite high, and so taking out a funeral insurance policy is generally a more affordable option for most people. Spreading this coverage across multiple policies might help some individuals find that they’re better able to manage their budget and also ensure they have sufficient coverage without putting too much strain on their finances.
On the other hand, multiple premiums for multiple policies can add up, especially when each policy has its own set of administrative fees and other charges. This might not be a sustainable cost in the long run.
What Do We Offer?
Here at Workerslife, we offer a range of funeral products.
Our customisable group funeral cover provides funeral coverage of up to R25 000 for the main member, spouse, and up to six children.
We also offer a comprehensive funeral benefit programme, which provides a diverse range of benefits up to R30 000 for yourself, your spouse, and as many as three children.
The platinum plus funeral benefit programme covers both parents and up to six children and pays out as much as R60 000 for the main member and spouse, with up to R20 000 for six children.
Our POPCRU 25 benefit, exclusively for POPCRU members, provides cover of up to R60 000 for main members and spouses, as well as up to R20 000 for seven children.
Build your insurance coverage to move ahead with confidence and peace of mind. Contact Workerslife for more information about our funeral policies.