The term is interchangeable with burial insurance, funeral cover, final expense cover, etc. The difference is location, primarily. The subject term is mostly peculiar to Australia and South Africa. Burial insurance is peculiar to the U.S. and Canada, among other places.
There are a lot of bills that can be expected connected to even the most basic of funerals aside from those obvious ones like a cemetery plot, a casket, and those services provided by the funeral director.
Other services might include flowers, catering, or food to cook for the extended family and friends who gather, and refreshments, new clothes, transportation, publishing an obituary in the newspaper, a headstone, and cemetery costs, etc.
In some societies, as in, some cultures in South Africa, funeral services can be elaborate affairs lasting several days and may include entertaining, feeding and lodging extended relatives who come from far and wide. There may be a feast involved (which would require the purchase of a goat), and music.
The Age Old Question
People from all income levels often require grand and fancy send-offs. There is great variation in funeral customs and etiquette between cultures and religions across the world. One universal question across all cultures is as old as the ages. That is: how to pay for all this without passing the hat.
The use of funeral cover is quite commonplace in many cultures, and has been used for centuries in some. But what can we do in a situation when our parents do not have much money left and have no funeral insurance? Who will pay for the funerals?
The adult children might be the most likely to step forward. A death of the last of two parents often brings out the worst in siblings, in terms of how well they get along and interact with each other. One possible reason is, of course, everyone is grieving, stressed out and to some degree may be overwhelmed at the prospect of making these arrangements under such circumstances.
The ideal scenario is when families or siblings can plan ahead. In the absence of funeral insurance, although it is sometimes a challenge to get siblings to agree on how to split the cost in such cases, one idea is to purchase funeral insurance for the parents. The siblings can then share the cost of the monthly premium.
The costs aren’t that high, especially when spread out among siblings, and the cover is relatively easy to get. Usually, there is no medical examination. The rates will be higher if the insured is a smoker, but usually, for a few dollars every month the family can have peace of mind about that funeral cover being in place.
The plans designed for seniors have a different rate structure than policies designed for younger people who will pay for it over the course of many more years. There are other approaches to obtaining cover for a younger person, as well. Pre-paid funerals (PPF) is a popular method. In the recent past, the PPF idea has flourished as is evident by how many operators there are in the arena (in Australia).
Under such arrangements, the funeral is pre-planned with a specific funeral director who covers the costs when the time comes.
If you enter into such a contract, ensure the family is aware that it exists. Otherwise, there might not be an easy way to determine if the deceased has the contract in place. Also, the funds paid over time may be invested in the name of the funeral director rather than the consumer. If the firm goes out of business, the funds may be difficult to recover. There are some additional guiding principles about the topic which should be looked at. Check out this consumer protection document for prepaid funeral insurance.
Notes on South African Funeral Insurance
There have been some negative lasting effects on some of the lower income portions of the society brought about by the prevalence of Aids and HIV. When so many are dying, there are too many families suffering from a loss of income associated with the death of the loved one. Funerals among this segment of the populace are often lofty affairs with few expenses spared in an attempt to maintain dignity for the deceased. These elegant funerals often cost many months’ worth of pay.
Fortunately, many people in this society have been involved with funeral associations which are informal organizations in the community for the purpose of providing funeral insurance. Still, not all households are covered and the HIV epidemic has taken its toll.
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The following video gives a brief overview of a few things that go into end-of-life planning and asserts the main reason to do it is out of love for your family. When the end comes, you will have relieved them of all the stress and angst -freeing them emotionally to celebrate you.
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