Stefan du Raan
You pay a monthly premium to have insurance when it matters most. But if you don’t adhere to policy rules you might end up losing out. Ensure this important cover is able to serve its purpose by following these simple rules.
Not only is the cost of living on the increase but the cost of dying is too, so investing in a funeral plan can prevent your family from going into debt in order to cover the costs. While signing up for funeral cover is relatively easy, mistakes can be made that could result in a claim not being paid. As many as 50%-60% of the complaints (for funeral plans) put before the Long Term Insurance Ombudsman are as a result of unpaid claims due to the conditions of the policy not being met.
It is vitally important that you read your policy and understand what actions can lead to the non-payment of a policy. Here are a few to consider.
Make sure your payments are up to date. If you have fallen behind or only paid a portion of the payment your policy will not be valid.
Be aware that there are waiting periods imposed, usually 3 months so if an event happens before that it will not pay out.
Never misrepresent information on the application form. This will instantly invalidate your claim.
Always be honest about any pre-existing medical conditions you or the insured person may have. If you do not disclose current illnesses the policy will be invalid.
Make sure the beneficiary of the policy is informed of its existence and knows who the policy is lodged with.
There are always “exclusions” in an insurance policy, for example the policy will not pay out if the insured person commits suicide within a specified time frame, or if the insured has a pre-existing illness that disqualifies them from cover. Check all the exclusions to ensure you or the person covered, qualifies.
Make sure that the policy has been bought from a reputable company. There are unfortunately many fraudulent schemes and policies sold each year. Your best bet is to stick with the larger insurers who have a track record.
Make sure the plan is suited to your specific needs. Different policies provide different benefits so if you see an advert on TV for a funeral plan don’t assume that they all offer equal benefits.
Funeral cover is available to almost anyone. Very few policies have limitations for applying, even AIDS sufferers can qualify, although they may have longer waiting periods and the premium will be more expensive. Funeral Plans can be taken out for a single person or as a family unit. This option allows for the policyholder’s parents, parents in law and children to be included in the cover.
It is important to update the policy if you decide to change a beneficiary or if a beneficiary dies. You cannot simply include the instruction in your will if you change your mind. The policy will take precedence over the will.
By adhering to these simple rules you will ensure that this important cover is able to serve its purpose.
*Stefan du Raan is employed in the Marketing Department at Hollard Namibia