Can someone explain to me why funeral insurance is so expensive? It has got to be one of the biggest rip-offs and forms of institutionalised abuse of South Africans. I did some shopping around online and could find the following quotes for R20000 funeral cover:
Simply – R81pm (but you also have to buy other forms of cover so the minimum premium is closer to R150 pm and includes R50k life cover). Hollard – R104pm, Dotsure – R73pm, Burial Assist – R100, Budget – R102, First for Women – R104, 1lifedirect – R123
Now compare the cost of a funeral policy to a properly underwritten life policy. Using the same information that I used to get the funeral policy quotes, I was able to get a quote for R300000 life cover (which includes funeral cover pay-out of R40k) for under R100pm.
It is clearly very lucrative cover as there are at least 30 providers in SA that I could find…and the vast majority of South Africans are being seriously ripped off by the funeral insurance industry. It is time that the Financial Services Board looked into this.