Funeral insurance is a term commonly used in South Africa and Australia. The term Funeral Cover is interchangeable, as is Burial Insurance and burial cover, which are the names used in North America.
Among the types of cover that can be had is that issued by a funeral director or association of funeral directors. In such a case the funeral director would help plan the arrangements and create a payment plan.
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Note: This page was last updated on 25th of April 2017
Friendly societies, funeral associations and benevolent societies are all similar. They date to ancient Roman and Greek civilizations. There is evidence that the benevolent societies paid for funeral arrangements and cared for surviving family members. To this day, the associations have, to different degrees, a social character to them.
The main function, though, is to provide help with funeral arrangements. These organizations are run by the members for the members. The members agree on the governing rules and collect premiums (premia). These associations are considered ‘informal’ insurers.
Formal insurers are the ‘for-profit’ insurance companies. When considering burial insurance, one can opt for ‘whole life’ or ‘term’ policies. Term policies are good until a certain age is reached then expire and must be renewed. Whole Life does not expire.
Some people opt for straight up life insurance, which is generally regarded as having the most value. For older people it may not be an affordable option, even if they are in decent health -depending upon their age. The lowest rates are for younger people.
Seniors might opt for a whole life policy designed for older people. It is not cheap but is available. It is marketed as ‘Seniors Insurance’ or ‘Pre-need.’ The seniors are the latest niche market as the so-called Baby Boomer’ generation has reached retirement age. They are likely the largest group seeking funeral insurance as they have reached the age where ‘how well they took care of themselves’ has begun to show.
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