Last Monday, 30 May 2016, Lee Bromfield, CEO of FNB life, the administrative and insurance distribution arm of First National Bank announced that despite the increased cost of living in South Africa, consumers had yet to be dissuaded from investing in funeral cover.
This week, Bromfield offers a guiding hand, educating consumers on how to avoid exploitation when taking out or being offered funeral cover.
“Unfortunately most people tend to only realise that they are being exploited when they are under pressure to pay for a burial. By then, it might be too late. Those who are lucky enough to even locate the said insurer are usually sent from pillar to post, spending more money trying to get their pay-out,” he said.
Bromfield highlighted the key areas to pay attention to, to avoid being a victim of unscrupulous insurance providers. These include:
Do your homework on the provider
Consumers need to gain knowledge of the provider’s track record, i.e. consult family, friends and other sources in order to make an informed decision. This will provide you with insight into the provider’s character and morality i.e. their ability to deliver on what they have promised.
Do not agree to anything you do not understand
It’s also very important to ask questions, especially those that are important to you, when being sold funeral cover. Transparency is something to take note of, as you need to careful of providers who avoid or ignore your questions.
Another thing to keep in mind is when the funeral cover provider will pay out. There are funeral cover options that will only cover 50% of funeral expenses if one of the beneficiaries of the funeral cover die within the first six months of taking out the cover. These policies will only pay 100% of the funeral expenses after a year. Make sure you read the terms and conditions to know under what circumstances your provider will pay out a claim.
Do not share your banking or payment details before accepting the offer
Consumers should be suspicious of providers that insist on getting your banking or payment details before having accepted the funeral cover offer.
Focus on the pay-out not peripheral value-adds
Your main focus should be your pay-out, as this is where the real value lies, and that your funeral plan takes care of your needs, as providers often take advantage of people by promising to provide peripheral value adds.
“In these tough times, it is very easy for people to fall victim to all sorts of funeral insurance scams. That’s why it’s vital to shop-around to get the best cover, from a reputable provider. Consumers should make informed decisions when taking up funeral plans,” said Bromfield.