If the COVID-19 pandemic has taught us anything, it is how quickly life can change and the importance of having financial protection and planning in place, so we do not leave our families in a financially vulnerable position. One of the certain but sometimes unpredictable changes we experience is death, and while many consider the plans they have made to be sufficient, there are sometimes issues that appear only after passing of a loved one and when its too late to address the issues.

According to the Ombudsman for Long-term Insurance, there are many different kinds of funeral policies, including group policies and individual policies that either cover one life or the life of extended family members. These policies can be sold directly to consumers by insurers, through financial advisers, by banks or shops, or through membership of other organisations.

Even if a funeral policy is structured to provide for a funeral service as a benefit, a funeral policy must always also provide for a sum of money to be paid as an alternative to a funeral.
There are many helpful tips and guidelines to follow when buying funeral insurance. Some of these include:

•   Always make sure that the person selling you funeral cover has a licence from the Financial Sector Conduct Authority (FSCA) to sell insurance. Ask the person to show you their licence.
•   Make sure that you know who the insurer is. Funeral policies are often administered and sold by third party funeral administrators.
•   If there is an application form, fill it in yourself. Make sure you read everything on the form including the fine print above your signature.
•   You must be sent a policy or a policy summary when your application is accepted. Read it and make sure you understand it. If not, phone and find out what it means.
•   Make sure that your premiums are paid every month on time. It is your responsibility, even if you are paying by debit order or stop order and always keep proof of payment. If the premium is not paid, the policy may be terminated, and a claim may be refused.
• Make sure that any beneficiary nominations (where you nominate the name of the person who must receive the benefits on your death) are up to date and still reflect your wishes.
• When the person covered by the policy dies, the claim must be submitted as soon as possible. Check in the policy how much time there is for a claim. If the claim is late, the insurer can refuse to pay the claim.
•   If a claim is refused for any reason, the insurer or administrator must give you the reasons in writing. If you are not able to resolve a complaint with an insurer, then you can contact the Ombudsman for Long-term Insurance.

Always remember that you have thirty (30) days “cooling-off” period after you receive the policy to cancel it if you are not satisfied. Educating yourself about funeral policies and what your rights are can help to avoid being “scammed” by illegal operators. It is important that you deal with trustworthy organisations and registered financial service providers. Take your time and do not rush into a decision to buy a policy.

“A common complaint about funeral insurance is that the claim was declined because the deceased passed away during the waiting period. Make sure that you understand the waiting period applicable to your policy, especially when adding a family member after the policy has already commenced,” says a spokesperson from the Ombudsman for Long-term Insurance scheme.

“Also ensure that you have correctly disclosed the relationship between you, the policyholder or main insured, and the family member you wish to cover.”

For more helpful tips and information, go to https://www.ombud.co.za/complaints/helpful-tips.

Call the Ombudsman for Long-term Insurance scheme on (021) 657 5000 or Sharecall 0860103236 if you have a complaint and the insurer has not resolved it to your satisfaction.

Speak to a registered financial service provider if you want to find out about what long-term insurance policies you might need, including life, funeral, income protection and disability cover.

Go to www.fpi.co.za to find an authorised financial planner and to www.fsca.co.za if you need to check if the financial services provider is registered and authorised to provide you with financial advice and sell you financial products.