Funeral Cover with No Waiting Period for Payout on Death

Funeral policies are one of the most popular insurance products in South Africa. These policies provide a cash payout to family members upon the death of a person who is covered. It allows the family of the deceased to pay for the costs of the funeral and any other expenses. As with most insurance policies, funeral cover has several conditions in place to ensure that the financial protection it offers is not abused by consumers.

One of these measures is a waiting period. It means that there is a period of time following the inception of the policy where the insurer will not pay out for any claim. Waiting periods can vary in duration but most insurers apply a 12 month waiting period to new policies. This means that the policy does not pay out for the first 12 months from the date that the cover started. You may have to instead look to a loan or other financial cover to pay for the funeral.

Why are there waiting periods?

There are several reasons why waiting periods are put in place. The main reason is that it ensures that consumers do not sign up for cover only when they need it. Ultimately by doing so these consumers are draining the resources of the insurer and disadvantaging the loyal customers who have been contributing to policies for years and even decades without claiming.

This type of waiting period is not unique to funeral plans. Medical aids and life insurance are some of the other financial products that have waiting periods in place for specific circumstances. It is therefore important to have yourself covered as soon as possible, rather than waiting till the last minute to sign up for cover. Most reputable insurers will have waiting periods in place and will not negotiate on these conditions.

Accidental Death and Murder

However, there may be exceptions to these waiting periods. Accidental death is one such example as is murder. Once again, it depends on the individual insurer but unforeseen circumstances like accidental death and murder are usually not subject to the 12 month waiting period. In fact a murder is also included in the term accidental death as it is an unforeseen circumstance even though it is an intentional act. Always clarify this with the funeral insurer.

For example, most insurers will pay out before the waiting period has elapsed if a person dies in an accident. The reason for this is that accidents are unforeseen circumstances. Accidental death can strike any person at any time, be it through a vehicle collision or a fall from a height.  Therefore the insured person could not have foreseen the accident and did not sign up for cover to immediately benefit from it.

Death from Disease

The question of whether death from disease will be covered or not can only be answered from an individual basis. When there is a chronic condition, and specifically a pre-existing disease like HIV, then the waiting period is applicable. Pre-existing means that the disease was present at the time the policy started. Most chronic conditions like HIV do not usually lead to death within 12 months from infection, which is the duration of the waiting period.

The situation may differ when it comes to acute conditions. These are conditions that arise suddenly and can be deadly but if not they do not typically last long. Usually a waiting period excludes a payout for death due to most diseases during this time. However, it may be considered on an individual basis and it is therefore important that policyholders discuss each case with the funeral insurer.

Natural Death

Although death from disease is considered to be a natural death in biological terms, most people considered ‘death from old age’ to be natural death. Funeral insurers will cover natural death but once again waiting periods may be the limiting factor. It is not uncommon for South African consumers to suddenly insure an elderly parent or grandparent as they become debilitated and death may seem imminent.

In these instances there will be no payout as the waiting period is applicable. However, if the person survives beyond the waiting period then there will be no restriction on the payout. Younger adults and children are unlikely to die from age. Therefore natural death in these cases may instead refer to death from diseases if it was not accidental as is the case with a road traffic accident.

Read more on life insurance vs funeral insurance.

Do Any Insurers Have No Waiting Periods?

Currently there are no reputable insurers who have funeral cover with no waiting periods, except when it comes to accidental death. It is important to understand the difference scenarios which will be applicable to funeral plan payouts during death. Claiming to be ignorant and threatening to take the matter further will not change the fact that there will be no payout.

Beware of any person or company that claims that there are no waiting periods in place irrespective of the circumstances. At times these parties may not be registered brokers or insurers. Alternatively when such products are offered, there may be a high repudiation rate meaning that most of the time the claims are not paid out due to some fine print that the consumer is made aware of at the time of the claim. Rather opt for funeral insurances from reputable insurers who are well known and have a good track history in the market.