Which is best - Life Insurance or Funeral Cover?

First of all ask yourself, which of the two is the least hassle?

  • Buying four funeral policies - R50, 000 each and R200, 000 in total - with zero medical questions, or
  • Buying one life insurance policy of R200, 000 with medical questions.

Funeral cover wins hands down, right? We don’t think so, but a surprisingly large amount of people do. Here’s why:

  • No chance of them rejecting your application because of your “sugar” problem.
  • No chance of them saying. “Sorry, we’re not paying your claim because you didn’t tell us…”
  • And if you need more funeral cover, you just buy more. The great thing about funeral cover is that they usually pay out within 48 hours of receiving all the necessary documents.

But hang on before you run out and buy as much funeral cover as you can.

Why would you want life insurance instead of funeral cover?

Two reasons spring to mind:

  1. Waiting periods, and
  2. Cost structure

Don’t take our word, visit the website of any funeral cover company and study their terms and conditions.

Waiting periods

Look specifically for a waiting period applicable to death by natural causes. Accidental death doesn’t seem to be a problem as they seem to pay the cover immediately. But when it comes to death by natural causes, the industry standard is around six months.

Compare this to a Different Life policy which covers you – for both natural as well as accidental causes of death – from the date we accept you.

Imagine a person buying R100, 000 cover:

  • The can either buy R100, 000 funeral cover or R100, 000 life insurance
  • They decide to go the route of hassle-free funeral cover
  • Two months after purchasing the cover, this person passes away from a stroke

So what would the result be?

  • The funeral cover won’t pay, whereas
  • The life insurance would have

Cost structure

While you were on the website of your favourite funeral provider, did you also notice how the costing works?

Generally it works on age bands. Here’s an example:

  • 20 – 25 year olds pay one price, while
  • 40 – 50 year olds pay another price for the same thing

Did you also notice that it makes absolutely no difference whether you’re male or female, and whether you smoke or not?

The 40 year old who smokes, who drinks excessively, who never exercises, pays exactly the same as everyone else.

At Different Life we look at you, errr, slightly differently:

  • Ladies pay less (Hey, don’t blame us; we also have to go home at night and face a few ladies of our own).
  • If you’re a non-smoker, you pay less (totally unfair to all the smokers we know, especially after you add the cost of a pack a day to the cost of life insurance).
  • If you sit all day in an office, you pay less (of course sitting behind the steering wheel of an 18 seater on Louis Botha Avenue doesn’t count, therefore expect to pay slightly more).

Let’s compare the cost of funeral cover to life insurance:

  • How much could R50, 000 funeral cover cost?

Take for example, a 25 year old person wanting R50, 000 funeral cover. Depending on where you shop this could easily cost R100 a month. But let’s run with R80 a month for now.

  • How much life insurance could you buy at Different Life with R80 a month?

Take for example a 25 year old male non-smoker working in an office environment, and earning R10, 000 a month – How does R280, 357 life cover sound?

See how much it would cost you by clicking here

If funeral cover is for funeral expenses, what is life insurance for?

Quite simple, if you die - for whatever reason – then the life cover is paid to whomever you choose, for whatever they choose. So if you have people you really care about:

  • While you might no longer be there,
  • You will know that their needs will be taken care of.

Which brings us to a BIG problem with funeral cover

What if you need a really large amount of cover?

Say for instance you want to buy a home for R1 million and the bank insists you take out life insurance. How would you do this with funeral cover?

Think about it for a moment. Most funeral insurance companies won’t allow you to buy more than one policy with them.  You might need to approach ten or more funeral insurance companies to get the million Rand cover you want. And what if the bank asks you to cede those policies to them?

With Different Life:

  • You can take out more than one policy with us.
  • You can buy up to R10 million in life insurance with us, and
  • You can increase your existing life insurance with a simple phone call

What if we gave you Funeral Cover as part of your Different Life insurance policy?

Here are 4 reasons why we think you should choose Different Life:

  • What if a Different Life policy could offer you way more life cover than any funeral cover policy could offer?
  • What if Different Life policy could do it much cheaper?
  • What if Different Life policy met you halfway and added R50, 000 worth of accelerated funeral cover to your life insurance policy?
  • What if a Different Life policy did all of the above AND made certain your favourite charity received a donation from you?



Posted in Insurance 101 on 10 Aug, 2017