What to do if your insurer cancels your funeral policy

Published on 1st November, 2023 at 09:35 am

Funeral cover protects you or your loved ones from the financial stress of paying for a funeral out of pocket. But what happens if your insurer cancels your policy? After a US-based insurer recently gave clients three months’ notice on their funeral cover, many South Africans are asking just that. Here’s what you need to know.

Reading time: 3 minutes

In this article you’ll learn:

• How funeral policies protect you financially
• How to choose a funeral insurer
• What to do if your funeral policy provider cancels your cover

How funeral policies protect you financially

As important as it is to give your loved one a dignified funeral, it can leave quite a dent in your pocket – a R12,000 to R150,000-sized dent, to be exact. Rather than taking out a high-interest personal loan that leaves you paying costly monthly instalments long after the deceased has passed on, funeral policies allow you to pay a comparatively small amount for the provision of a lump sum amount (and usually some other benefits) at death.

This means you can plan and prepare your loved one’s funeral using cash in hand and not debt, thus protecting your own financial future – and peace of mind.

How to choose reliable funeral cover

It’s important that you take out funeral cover with a reputable insurance provider that has a credible history. This gives you a greater level of assurance that they won’t let you down in your time of need.

Once you’ve selected the cover that best suits your needs, read through the policy and understand the terms and conditions. Being familiar with your policy wording will help you in the event your insurer cancels your funeral policy, for example.

What to do if your funeral policy provider gets cancelled

If you receive communication that your funeral policy is being cancelled, call your financial advisor immediately, as they will be able to help you navigate what follows. If your current provider has not arranged an automatic transfer of your policy to another provider, focus on securing a new policy with a different provider to ensure you’re not left without coverage – or at financial risk.

Insurers generally have waiting periods in place when you take cover with them; however, you may find one that will waive this waiting period since you would’ve served it already, albeit with a different insurer. This is the ideal situation.

Having your funeral policy cancelled is unfortunate, and it’s likely to cause some panic and anxiety, but it’s important to think clearly and act quickly. If you believe the cancellation of your policy is outside the stipulated terms and conditions of your policy, contact the Ombudsman for Long-Term Insurance.

Get personalised, expert financial advice – and earn 8 000 tier points! – by making an appointment to speak to a financial advisor today. Click here to request a visit.