Funeral Cover Buyers Guide

South African funerals average R30,000 - R55,000 by 2025 estimates, and rural cultural ceremonies can exceed R80,000. Funeral cover exists to deliver cash within 48 hours - here is how to structure it properly.

How funeral policies actually work

Funeral cover is regulated short-term insurance offered by both licensed insurers (Sanlam, Old Mutual, Avbob, Hollard) and underwritten by larger insurers via brand partnerships. Policies pay a fixed lump sum on death of a covered life, within 24-48 hours of submitting a certified copy of the death certificate and ID.

Family plan structure

Member | Typical cover band | Monthly cost (R40k cover)
Main member | R10k-R100k | R55-R145
Spouse | R10k-R100k | R55-R145
Child 14-21 | R10k-R30k | R12-R28
Child < 14 | R5k-R20k | R8-R18
Extended family (parents, in-laws) | R5k-R50k | R45-R180 per life

Waiting periods (regulated)

Natural death: 6 months

Suicide: 12-24 months

Accidental death: no waiting period

Existing policy transfer: most insurers honour previous waiting periods served

Premium escalation

Most policies offer 0%, 5%, 7.5% or 10% annual escalation. Inflation-matched (5-7%) is wise, since funeral costs have risen ~6.4% CAGR over the last decade. Zero-escalation policies feel cheap today and become insufficient in 10 years.

What to verify before buying

Underwriter - is the policy underwritten by a registered insurer (FSCA licensed)? Avoid burial societies that are not insurance.

Cash payout, not "service" - paid-in-cash policies give the family flexibility. Pre-arranged service policies lock you to one undertaker.

Cover from age 65+ - some policies cap entry age at 64 or premium-escalate sharply after 65. Verify the maximum age.

Whole life vs limited term - whole life pays whenever death occurs; limited-term policies expire if you stop paying.

Tax & payout rules

Funeral policy payouts are tax-free to the nominated beneficiary and bypass the deceased estate, avoiding executor delays. Always nominate a specific person (not "the estate") and update after life events.