Taking up funeral cover for parents is a common practice in families but people often make a number of mistakes when choosing a plan. In some cases, such mistakes can lead to pay-out delays and in extreme cases, claims can even be denied.
One of the reasons for the mistakes is that people tend to approach the process of taking up funeral cover for parents as a “box-ticking” exercise. This is very risky as people overlook important factors that are critical to their claim being paid out.
There are considerations to keep in mind when taking up a funeral policy for a parent, because the process is slightly different to that of a younger person.
The entire process is designed to ensure that the provider performs a proper and fair risk assessment, and the customer is required to provide accurate information.
Some of the important considerations to keep in mind when starting the process of taking up funeral cover for your parents:
Do not wait until your parents are near retirement
Sometimes people delay taking up funeral cover for their parents, hoping to only start the process when the parents approach retirement age.
Waiting until your parents are close to retirement is risky. It will also cost you more money as insurance providers have to consider a number of risk factors in your premiums, including age. If you can afford the premiums, there’s no reason to delay taking up a funeral plan for you parents.
Be aware of waiting periods
If you are taking up a funeral policy when your parents are close to retirement, a provider might include a waiting period. This varies, depending on a number of things, but people need to be aware of the potential implications.
Know what you’re getting
Over the years, funeral cover has evolved towards cash payouts as opposed to the standard arrangements of supplying a casket and other small items.
The cash option allows families more flexibility on what they can do with the payout. Depending on the cover amount, if families spend wisely, the funds could even cover expenses beyond the funeral.