Consumers who do not plan ahead for funerals could find themselves overspending in a last minute effort to give their loved ones a dignified send off.
Lee Bromfield, FNB Life Chief Executive Officer says losing a loved one is a traumatic experience that can have a devastating effect on your physical and emotional wellbeing. Therefore, managing expenses for a big event like a funeral during this difficult time often proves to be challenging for many people. They end up overspending and resorting to debt to finance the shortfall.
“Like any other major event, you need a plan and budget in order to keep spending in check when arranging a funeral. Often, the cover amount will determine your flexibility as well as limitations. As a result, you should always consider the type of funeral you want when deciding on the policy cover amount,” he adds.
Bromfield shares a few tips on how consumers can avoid overspending on a funeral.
- Do research – it is essential that you do research and find out what a standard funeral costs.
As a starting point get costs for coffins or caskets, flowers, transport, undertaker, food, catering and venue or tent hire. This will give you a basic idea of what you will be able to afford depending on how much you are insured for.
- Talk about death – death is usually the last topic that people look forward to at the dinner table. However, talking to your family about your policy and the type of funeral you want will ensure that there is no confusion on what constitutes a dignified send-off.
Therefore, the funeral cover amount paid out should be enough for the entire service.
- Avoid societal pressure – be careful not to conform to societal pressure and arrange a funeral that is way above your means and budget, in an effort to impress neighbours, colleagues, friends and family. This can potentially lead you to debt and further compromise your family’s financial wellbeing.
- Review your policy – always leave a bit of room for inflationary increases when taking out a policy, and increase the cover amount accordingly, if necessary, when reviewing your policy.
Failure to review your policy and cover amount can lead to under insurance, where the sum insured can no longer afford you the type of funeral you want.
“If you really have to borrow money for a funeral due to unforeseen circumstances, use trusted credit providers that will not charge you far more on interest than what is legally acceptable,” concludes Bromfield.