Insurance experts have flagged increased reliance on funeral insurance as a substitute for financial security and warned that the trend could leave families vulnerable in the long term.
Data has shown that at least 75% of households have funeral cover and this is outpacing other forms of insurance, including life cover, which reaches only about a quarter of households.
Jay Malatji, Metropolitan provincial general manager, said this reflects the importance placed on dignified burials and it has also led to growing practice of taking out multiple funeral policies across different insurers.
Funeral cover designed to meet immediate burial expenses
He explained that families tend to stack up funeral covers with the hope of having better financial means to sustain the family even after the funeral. However, he highlighted that funeral cover is designed to meet immediate expenses afer death such as burial and related costs and it is not structured to support households over time.
Even when multiple policies are in place, he said, each comes with its won premium and fees, which can add up significantly over the years.
“This is a concerning trend because it moves funeral cover beyond its original purpose. It is now no longer just about covering burial costs, but about trying to build some form of financial security in the absence of other options,” said Malatji.
He said another concern is that different policies may have varying waiting periods and terms. This means that not all policies will necessarily pay out when needed, despite giving the impression of multiple layers of protection.
Accessibility breeds misuse
Because funeral cover is generally easy to access, with lower premiums and fewer medical requirements, it has become the entry point into financial protection for many South Africans. He argues that this accessibility has also contributed to its misuse.
“This is when financial planning becomes crucial because there are other products, such as life cover, that are designed for long-term expenses. It is structured to replace income, settle debt, and support a family over time. No matter how many funeral policies are stacked, they cannot fully replicate that kind of long-term protection,” said Malatji.
“When money is tight, people are forced to prioritise, and not every policy survives. The reality is that once a policy lapses, the premiums that have already been paid are not recovered. Years of contributions can simply fall away,” he added.
He said the issue is not that consumers are making poor decisions, but that they are working within limited options and choosing products that feel accessible and familiar. He also emphasised that funeral cover has clear limits and should not be used as a replacement for comprehensive financial planning.
- At least 75% of households have funeral insurance, outpacing other insurance types like life cover, which only covers about a quarter of households.
- Funeral insurance is primarily designed to cover immediate burial costs, not to provide long-term financial security for families.
- Many families take out multiple funeral policies, increasing overall premiums and fees, but this may not provide reliable or layered protection due to varying terms and waiting periods.
- The accessibility and low cost of funeral cover have led to its misuse as a substitute for life cover and other long-term financial products, which better support income replacement and debt settlement.
- Experts warn that relying solely on funeral cover can leave families vulnerable, emphasizing the need for comprehensive financial planning beyond just funeral insurance.
Insurance experts have flagged increased reliance on funeral insurance as a substitute for financial security and warned that the trend could leave families vulnerable in the long term.
Data has shown that at least 75% of households have funeral cover and this is outpacing other forms of insurance, including life cover, which reaches only about a quarter of households.
Jay Malatji, Metropolitan provincial general manager, said this reflects the importance placed on dignified burials and it has also led to growing practice of taking out multiple funeral policies across different insurers.
He explained that families tend to stack up funeral covers with the hope of having better financial means to sustain the family even after the funeral. However, he highlighted that funeral cover is designed to meet immediate expenses afer death such as burial and related costs and it is not structured to support households over time.
Even when multiple policies are in place, he said, each comes with its won premium and fees, which can add up significantly over the years.
“
He said another concern is that different policies may have varying waiting periods and terms.
Because funeral cover is generally easy to access, with lower premiums and fewer medical requirements, it has become the entry point into financial protection for many
“
“When money is tight, people are forced to prioritise, and not every policy survives.
He said the issue is not that consumers are making poor decisions, but that they are working within limited options and choosing products that feel accessible and familiar. He also emphasised that funeral cover has clear limits and should not be used as a replacement for comprehensive financial planning.
