Life Insurance & a Funeral Plan? | Budget Insurance Blog

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Knowledge Hub

Insurance

Do I need life insurance and a funeral plan?

5 min read

Do I need life insurance and a funeral plan?

Insurance May 29, 2019 By Budget Insurance

Do I need life insurance and a funeral plan?

Insurance May 29, 2019 By Budget Insurance

Life insurance and funeral cover are two separate products that both serve a purpose in the event of your passing. We break down the difference so you can make the right choice for you and your family.

Life insurance

When you take out life insurance, you are protecting your family from the financial responsibilities of the household should you die. Life insurance will provide for them financially so they can still continue their lifestyle, pay off debt and continue with their education.

When you take out life insurance, you can choose the amount that should be paid to your family on your death. Although the general amount is about three times your annual income, there is no set rule. The monthly amount you have to pay the insurance company (your monthly premium) is then calculated based on this amount as well as risk factors such as your age, lifestyle and general health. Consider what you want to leave for your family that you can afford without having to struggle each month to pay your premium amount.

Funeral plan

A funeral plan will pay out a lump sum to your family if you die to cover your funeral costs.

Providing a loved one with a suitable send-off is an important part of the mourning process, but it can be expensive. To avoid families going into debt, funeral cover is generally paid out within 48 hours of death to cover things like flowers, catering, coffin, burial or cremation, and other expenses related to a funeral.

Why you need both

Because life insurance and a funeral plan are two different products, it’s a good idea to have both.

Losing a loved one is a devastating experience and the last thing someone should be worrying about is the money to provide a dignified send-off. This is why you would need a funeral plan.

It’s also important that if a breadwinner dies, the remaining family is able to continue with life without getting into debt or giving up education in order to earn money, making life insurance vital.

The information contained in this article is for information purposes only and does not constitute professional advice.

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