[Rek jou cheque] Life and death policy choices: Get help mentally and financially when loss occurs
When we lose a spouse, sibling or parent, our grief can become overwhelming.
Loss is understood as a natural part of life, but we can still be overcome by shock and confusion. This can lead to prolonged periods of sadness, and even depression.
The last thing anyone needs when death hits is to have problems with money, especially insurance.
Too often, issues with life insurance and funeral policy claims leave many South Africans distraught, because they don’t have access to the funds they expected to receive at such a tragic, difficult time.
Deidre Wolmarans, Head of Service at Metropolitan, explains: “Common mistakes are easy to avoid, but you must be proactive to get the true benefit out of a policy. During such an emotional event, when the time comes to claim, it can be a harsh realisation that policies weren’t kept up to date.
“Problems include non-payment of premiums, not having the policy for long enough (waiting periods) and leaving out key details. It’s crucial to avoid these costly mistakes for policy claims to be valid.”
The Financial Sector Conduct Authority estimates that only 1 in every 10 South Africans has life insurance, while less than half of South Africa’s adults have a funeral policy, which means we’re under-insured as a nation for the inevitable: death.
But for those who are covered, it’s best to check that everything is in place before it’s too late.
“To take a step back and explain the difference, life insurance pays out when you die, while a funeral policy makes provision for the expenses involved in your funeral and is usually paid out soon after you pass away. Both options have terms and conditions that must be followed to avoid claims being rejected,” she adds.
The top issues include:
– monthly policy premiums lapsing
– claims submitted before the waiting period has come to an end. A funeral policy must often be active for six months before a claim.
It’s so important to have cover in place as soon as possible, with the supporting documents lined up so that enough time can go by for your policy to be active and for your loved ones to be able to access the money you thoughtfully intended to put aside for them.
Accidental death cover means that you can only claim if the death is due to unnatural causes, which is a common reason for some claims being rejected, alongside having no insurable interest on policies, and if suicide is involved within the waiting period.
If you forget to nominate a loved one, the policy will be invalid. Suicides are typically covered after a longer waiting period of 12 months, which many may not realise.
Wolmarans adds that once cover is in place, you must keep up with the monthly premium and if the expense becomes a challenge, chat to a trusted financial adviser to consider removing some benefits or reducing cover.
“You could even benefit from Metropolitan’s Premium Skip, as one example. Whatever you do, don’t put your head in the sand and cancel a policy, let is lapse or leave out crucial information,” she says.
You may think you have time to sort out your policies, but not doing it can end up being costly for your loved ones left behind.
If you are the breadwinner, your death would mean a sudden financial loss for your family but having a policy that is up to date means financial support will reach your loved ones as you intended.
“Even though many of us don’t like to think about this tough subject, being prepared means less pain for your loved ones and that they will be protected while your legacy lives on,” Wolmarans concludes.
Let’s be clear– it’s perfectly okay to ask for help when someone close to you dies. Grief can sometimes feel like a dark hole that you’re stuck in, and reaching out for support is like grabbing hold of a lifeline.
There’s no right or wrong way to grieve. It’s a deeply personal process, and it’s okay to move at your own pace, but you don’t have to do it alone.
Reaching out can be one of the bravest things you can do. Do not let anyone deter you from making contact with a grief counsellor, a debt counsellor, financial advisor or even just someone you feel comfortable in talking to during your time of loss.
The South African Depression and Anxiety Group (SADAG) is a non-profit organisation that provides comprehensive mental health support, including resources for individuals coping with loss.
If you’re feeling overwhelmed, call them on 0800 21 22 23.
dailyvoice@inl.co.za