It is safer to join a funeral insurance scheme than a burial scheme.
Insurance scheme: Your money goes to a big, safe insurance company usually via a broker (ie. A funeral parlour)
Burial scheme: Your money goes to a private business where the law cannot help you so effectively.
Never join or pay any scheme offered by ‘agents’ in the field who ask for your money. Only pay at a proper business, office, shop etc.
- Ask who the insurance underwriter is. The law says the name or logo of the underwriter must appear on all stationary ie application forms, receipts etc. The underwriter must be a known insurance company ie. Groups R Us, Hollard, Rentmeester, Old Mutual, Metropolitan etc.
- Check that the broker will pay out your claim in cash if you wish. It is your money and the law (Long Term Insurance Act 52 of 1998) says this is your right. If you get cash you are free to spend your money where it is needed most and not spend it all at the funeral parlour.
- Ask what the waiting period is. It must not be longer than 6 months.
- Ask what the ‘exclusion’ waiting period is for death from suicide or HIV related causes. It must not be longer than 2 years.
- Every time you pay you must get a receipt. Keep it safe – it will be needed in case of a claim.
If you are unhappy with any answers to the above questions be very careful before you pay any money or sign any paper.
We hope this information has helped to keep your money safe.