Life Insurance Vs Funeral Cover: What’s the Difference?

Posted by Hippo on 14 May 2025

Woman with coffin at funeral paid for by funeral cover

Understanding the differences between life insurance vs funeral cover can feel like being forced to read the T&Cs of a new app before you can use it. Tedious, confusing, and something you’d rather skip. But much like those T&Cs, ignoring the details could leave you in a sticky situation later.

While both life insurance and funeral cover help your family financially when you’re gone, they serve different purposes. One is designed to secure your loved ones’ long-term future, while the other ensures they can afford a dignified farewell. Let’s break it down so you can make the best choice without needing a financial dictionary.

What is life insurance?

Life insurance is a risk policy that allows you, as a breadwinner, to financially provide for your family when you pass away. In other words, it lets you replace the income you would have earned when you're no longer around to support them.

Here's how it works: First, decide how much money you want to leave behind. Then use our free life insurance comparison tool to find a policy you like and a premium you can afford. Finally, start paying a monthly premium. As long as those premiums are up to date (and subject to a few terms and conditions), your loved ones will have access to a financial buffer should you pass away.

What is funeral cover?

Strictly speaking, funeral cover is part of life insurance. Funeral cover is designed to cover the immediate expenses associated with a funeral, ensuring that your family can give you a dignified send-off without the financial strain.

Unlike life insurance, which provides a lump sum for various financial needs, funeral cover specifically caters to costs like the casket, burial plot, catering, and other funeral-related expenses. It's typically a smaller, quicker payout aimed at covering short-term costs. Use our handy funeral insurance comparison tool to compare funeral cover quotes in minutes.

How do the costs compare?

When comparing life insurance and funeral cover options, it’s important to consider each provider’s benefits and structure. Here are a few to compare:

1Life: Offers life and funeral insurance with the option to cover up to 16 family members under a single policy. Their offerings range from up to R10 million Life cover and up to R50 000 Funeral cover and include fast payouts and competitive monthly premiums.

Old Mutual: Provides flexible life insurance options designed to fit your lifestyle, including cover for critical illness, disability, and death. Policies are tailored based on your needs and financial goals, covering between R150 000 and R3 million.

Momentum: Momentum Life Insurance covers death, disability, and critical illness with the ability to customise your policy. They also offer rewards for healthy living through their Multiply programme and up to 35% discount on your premiums through their LifeReturns® programme.

The benefits of having both

While both life insurance and funeral cover offer financial protection, having both can provide comprehensive coverage for your family.

Immediate Financial Relief
Funeral cover ensures that your family has immediate funds to cover funeral expenses, preventing the need to dip into savings or take on debt during an already challenging time.

Long-Term Financial Security
Life insurance provides a more substantial payout that can support your family's ongoing financial needs, such as paying off a bond, funding education, or maintaining their current lifestyle.

Peace of Mind
Knowing that both immediate and future financial needs are covered allows you and your family to focus on what truly matters, without the added stress of financial uncertainty.

Prepare for the inevitable by comparing quotes with Hippo

Life is unpredictable, but your family's financial future doesn't have to be. By comparing life insurance and funeral cover options on Hippo.co.za, you can find policies that suit your needs and budget. Don't leave your loved ones in the lurch. Take action today to ensure they're protected tomorrow.