The purpose of a Funeral Cover policy is to cover the burial expenses such as buying a casket and paying the funeral director when you or a loved one passes away. It’s comforting to know that you’re financially protected against a death in the family and that your surviving loved ones can grieve without having to worry about how those funeral bills are going to be paid.
Funeral Cover companies understand that death is a stressful experience for the family and always try to make the claims process as smooth as possible for policyholders. Yet, it’s not unheard of for them to reject a claim on the basis of exclusions or a breach of conditions. We've compiled a list of seven policy rules you need to be aware of to avoid ending up empty handed when you need to claim.
One of the main reasons insurance companies turn down claims is because the payments are not up to date. Like any other policy, Funeral Cover requires monthly payments from the main member, so if you’ve as example only paid for the first eighteen months and claim five years after you’ve signed up, the policy would have lapsed. In order for the policy to fully benefit you, you need to make timeous payments. If your account is debited each month, ensure that there is enough money to put into the policy.
When taking out the policy, it will state the waiting period on claims. Cover for accidental death usually starts immediately but for natural causes you need to be on the books for up to six months before the policy can pay out. If you seek compensation for illness-related death during the waiting period, your claim will usually be rejected.
Pre-existing medical conditions or non-disclosure thereof
If a family member has a chronic medical condition such as diabetes or hypertension at the time of taking out the Funeral Cover, you may not be able to request compensation for their death if they die within 24 months of signing up.
Funeral products are usually underwritten, meaning that you won’t be subjected to medical exams or blood tests. However, when signing up, it’s important to disclose your or a family member’s medical history. Insurance companies can refuse to payout any benefits if they discover you haven’t been open about existing illnesses, even if you claim after the waiting period.
Providing incomplete or inaccurate information at claims stage
A claim against the Funeral Cover policy cannot be made if the death has not yet been registered at the nearest Home Affairs office or at your preferred funeral home. Similarly, your claim cannot be processed if you have not submitted all the necessary documents (certified copy of death certificate, copies of ID or passport for the deceased and beneficiary, and bank details of the beneficiary) or written incomplete or false information on the claims form and beneficiary form.
Buying Funeral Insurance is one of the most practical ways you can prepare for death, but before you sign on the dotted line, it’s important to read the fine print of your contract and make sure you understand what is expected from you. If you are dissatisfied with the reasons an insurance company provides for dismissing your claim, you have a right to lodge a complaint at the insurance company’s customer service department and request a copy of their complaints handling procedure for further relief.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice.