As with any insurance product, funeral plans have a restriction on the age of a person covered. This can be difficult for a person looking to start cover much later in life. Without the proper cover, family members will very likely have to bear the cost of a funeral out of their own pocket once the elder in question passes on. It means that the family not only has to bear the loss of a loved one but has to also take on the financial strain of a funeral.
We all know that funerals can be costly. Even a bare basic funeral can set you back around R20,000 to R30,000. Everybody wants ensure that their loved ones are given not only a dignified send off but also a special farewell which ultimately costs money. Naturally the elderly need to be more concerned with this and the financial restrictiosn of old age makes it difficult to save up for their own funeral.
It may seem unfair that older people are discriminated against but this is not discrimination. Restrictiosn on age are largely due to the risk profile. An older person is more likely to die sooner than a younger person which means that the insurer will very likely have to payout sooner. In this event the payout may be more than the sum of all premiums paid by the policy holder. Understandably this does not make business sense for an insurer.
Funeral Cover for Over 70 Year Olds
South Africans who are over 70 years but under 75 years of age do not have to be too concerned. Most funeral insurance plans in South Africa will cover up to the age of 75 years. They can then easily be covered under their own plan or that of their children. These days South African insurers allow the policy holder to cover grandparents and in-laws as well under family funeral cover, thereby increasing the options available to over 70 years olds.
Funeral Cover for Over 75 Year Olds
At the age of 75 the situation becomes a littly tricky. There are very few insurers who are willing to take on the risk of a person at this age. Even if a 75 year old is in good health, the reality is that the remaining years are very few. However, there are still some funeral plans that will consider covering a person of 75 and older but only if they started cover before the age of 75 year or even earlier.
Funeral Cover for 80 Year Olds
By the age of 80, any remaining insurers who would have considered cover past the age of 75 years will most likely decline cover to new clients. Existing clients who signed up much earlier in life may also find that their cover will fall away, usually by the age of 75 years. This limits the options for funeral cover for 80 year olds. However, funeral schemes may not have the same restriction as they have been collecting funds specifically for a funeral, and d not work in the same way as insurers.
Funeral Cover for 85 Year Olds
There are no reputable insurers who will start new funeral cover for a person aged 85 or older. Funeral schemes may also decline cover unless a person is prepared to pay a very hefty down payment and large monthly instalments. However, the only reasonable option at this point is a funeral scheme but ideally it should have been commenced from earlier in life. Consider a savings option instead such as a fixed deposit that is bequeathed to a family member for funeral costs. Speak to a bank about the type of savings account that can ensure easy and quick withdrawal.