How many of us are regimented in saving income each and every month and never touching it for any other reason than your eventual death? If you are one of those individuals then I propose you open a savings plan and start saving your cash. The truth is that regimented savers will have a better return on their money than if they got funeral insurance.
Funeral insurance however is the best choice for the rest of us who are not so competent with putting money away yet who still need to do the responsible thing by saving funds so that our family members don’t need to obtain large loans from banks in order to pay for our funeral. For more information on health plans, go to http://www.instantlife.co.za
The way funeral insurance performs is quite simple. You buy an insurance policy for a certain amount of money and you pay affordable monthly installments. In the event of your passing your heirs will be paid out the one time payment of money that will then be utilized to fund your funeral expenses. Funeral expenditures such as the paying for a coffin, flowers, a burial plot and the hiring of a hearse cost a considerable amount of cash when one adds everything up. Few people can afford to cover thousands for the burial of a loved one suddenly, and that’s why having a funeral plan implies that your family do not have to be economically burdened.
There are however several things that you should check prior to buying a funeral insurance policy to make sure that you are not paying more cash for a policy than you should.
Should have a cancellation option
The funeral insurance policy which you select must have a cancellation option. Solid funeral insurance will allow you to cash in your policy. If there is no cancellation option on the insurance policy then you could very well find yourself paying premiums until you die, well exceeding the costs of your burial.
Policy Price Should Include Inflation
The premium you pay should cover the cost of inflation. Even though funeral costs may increase in the past this should not affect your premiums. Inflation needs to be calculated into the price. Do not buy an insurance policy which does not have fixed premiums for the duration of the insurance plan. You will only end up having to pay more than you should in the long run.
Verify That You Don’t End Up Paying More In Premiums Than The Value of The Policy
You need to estimate just how much you will actually be investing in compared to the value of your insurance policy. If by way of example you take out funeral insurance with the payout benefit of R20 000 when you are 35 yrs at R100 per month, if you pass away at the age of 75 years you would’ve paid monthly premiums to the value of R 48 000.
It’s also for this reason that it is not advisable for young individuals to acquire a funeral policy but another type of insurance as they will simply end up paying far more than the real worth of the policy.