Question:
I have heard many people complaining about funeral policies and funeral plans. A friend of mine suggested that I take out a life policy on my parents, instead of a funeral policy, but can this be done and at what cost?

Answer:
There are a number of issues with this. Firstly if you approach an insurance company to do this, they will require strong motivation from you, and the chances are they will be reluctant to write the policy.

A life insurance policy for someone over sixty would be prohibitively expensive, especially if the person has failing health. The industry employs some if the brightest minds in the world to work out the risks and returns on policies.

They know that if you insure a 65 year old for R1-million, the chances are they will have to pay out in ten years or less, so the premium would have to be in well in excess of R12 000 per month to make it viable and the individual would have to be in perfect health.

It would be a bit easier if the 65 year old took out the policy themselves, but again the premium would probably too high to justify. A funeral plan with a reputable company would be a better option.

RSS
Digg
de.li.cious
facebook